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Argue for or against the proposition that, in the context of wealthy and powerful transnational corporations, it is inappropriate to assume that each company in a group is a separate legal person.
Member rating: No Rating | Words: 1300 | Submitted: Mon Mar 31 2008
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"Argue for or against the proposition that, in the context of wealthy and powerful transnational corporations, it is inappropriate to assume that each company in a group is a separate legal person." The principle of separate legal personality was developed in the Salomon1 case, having first been acknowledged in Edmunds v Brown and Tillard.2 A company is recognised as a person separate from its members on incorporation. There are, however, various Common Law and Statutory exceptions to this rule. 'Lifting the veil' involves looking behind the company's separate legal personality to make its members liable to the creditors rather than just the company in it self.3 This can be distinguished from making Directors of a company personally liable. Common law exceptions Under the English common law the main exceptions to the Salomon principle have been identified in Adams v Cape as single economic entity, fraud or façade and agency.4 Single economic entity Where a group of...
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