Learning Cycle 2: Separate corporate legal personality/Piercing the Veil Intended Learning Outcomes Explore the concepts of separate legal personality and limited liability, and particularly their justifications Consider the idea of modern corporate groups Examine the situations in which a court may be prepared to disregard the corporate veil Explore the doctrine of "piercing the corporate veil" Essential Readings 1. Hannigan, Chapter 3: Corporate Personality 2. Salomon v Salomon & Co [1897] AC 22 3. Adams v Cape Industries [1990] Ch 433 - focus on Slade LJ at 531-549 4. Prest v Petrodel Resources [2013] 3 WLR 1 5. Short video of Lord Sumption's judgement from Prest (feel free to watch some of the other members of the Court) 6. https://www.youtube.com/watch?v=9R04fGn2uDM 7. Lungowe v Vedanta Resources plc [2019] UKSC 20 8. Short video on you tube: Vedanta Resources PLC v Lungowe [2019] UKSC 20 9. available at https://www.youtube.com/watch?v=b-7xy98SN74 10. Okpabi and others v Royal Dutch Shell Plc and another [2021] UKSC 3 11. AAA v Unilever plc [2018] EWCA Civ 1532 (Glance at this. Don't worry too much if you run out of time) 12. Kadie Kalma & ors v. African Minerals Ltd & ors [2020] EWCA Civ 144 (Again, glance at this, we'll cover it during our large group session) # Thesis/Arguments Notes Separate Legal Personality 1 Brenda Hannigan1 On incorporation, a company becomes a legal entity separate and distinct from its shareholders and it is At incorporation (registration with Companies House), a company:2 (1) Is separate from those that own it and manage it Key obiter dicta from Viscount Haldane LC in Lennard's Carrying CO Ltd v Asiatic Petroleum Co Ltd [1915]: 1 Hannigan B, "Chapter 3: Corporate Personality," Company law (6th ednOxford University Press 2021) 2 Refer to LC2 | Lecture Slides | 25 October 2022
not the agent of those shareholders, not even if it is a one-man company with one shareholder controlling all its activities. "A corporation is an abstraction. It has no mind of its own any more than it has a body of its own" (2) Can sue and be sued (3) Its assets and liabilities are different from those of the owner and managers In the case of limited companies, shareholder liability is limited to their capital contribution. Shareholders would be liable to pay for their shares, not the company's debts. (4) Becomes a separate legal entity This means that every company has its own legal personality. This fundamental principle of company law- that the company on incorporation becomes a separate legal entity in its own right- was established by the House of Lords in Salomon v Salomon & Co Ltd. Key Case: Salomon v Salomon & Co Ltd Facts of the case Issue Judgement/Signifi cance/Impact Mr Salomon was The case initially a sole concerned claims trader who was of certain carrying out a unsecured business as a leather merchant. In 1892, he process of formed the company Salomon & Co Ltd. Mr Salomon, his wife, and each of his 5 children accordingly,