These are all the notes on Corporate and Individual Liabilities that I brought into the open-book exam in 2016 with a high First Class on problem questions (over 80%). They contain all the key cases, case summaries, and legislation, along with explanations of key concepts. Includes piercing the cor...
The Law Relating to Private Companies – Corporate and Individual Liabilities
Shareholder Liability
Ways of holding shareholders liable (without piercing the corporate veil)
• by attributing the acts/liability of one person (company) to another (shareholder)
• rule of agency -
◦ if you can establish company is the agent of the shareholders, they will be liable
for the company’s acts
• trust (including equitable trust) -
◦ if a company owns property on behalf of shareholders, shareholders will be
regarded as the owners, or if you can show the company and shareholders have
joint responsibility, they will be jointly liable
• tort (see below)
• note - limited liability =/= legal personality, although closely linked, and often being
regarded as part of the former. The ways listed can hold shareholders liable (losing
protection of limited liability) but without touching separate legal personality. Think of
unlimited companies (no limited liability, but have separate legal personality still).
Piercing the corporate veil
• means to hold a shareholder liable in certain circumstances by identifying him with the
company in law (essentially disregarding separate legal personality)
• ‘lifting the veil’/looking behind the veil sometimes used to describe concealment cases
instead
• piercing the veil only used for ‘those cases which are true exceptions to Salomon - i.e.
where a person who owns and controls a company is said in certain circumstances to be
identified with it in law by virtue of that ownership and control (Petrodel, per lord
Sumption) (separate legal personality is disregarded, the owner gets identified with the
company as one)
Grounds for piercing the corporate veil:
• statute
• agency
• trust
• fraud
• justice
• single economic entities
Statutory Grounds
• examples:
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller kabby7. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £3.98. You're not tied to anything after your purchase.
