by Richard Kok Editor
Re-examining the Exceptions to the ‘Corporate Veil’
The principle of ‘corporate veil’ is fundamental to the foundation of company law. It is a legal fiction propounded in the eminent case of Salomon v A Salomon & Co Ltd (1897) AC 22 (‘Salomon’) being the idea that a company has a legal identity separate and independent from that of the individuals behind it, such as its directors, shareholders and investors. When a company is incorporated, there is in effect a ‘veil’ of incorporation which shields the owners. Its purpose is to restrict or limit personal liability of businesspersons and entrepreneurs in their acts on behalf of their companies by instituting corporate capacity and liability, thereby stimulating business initiatives and growth.