English Case Law on Piercing the Corporate Veil

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Piercing the corporate veil is a term that is commonly used in corporate law to refer to cases in which the limited liability of the Corporation becomes unlimited to be able to impose certain responsibilities either to the particular Corporation or to the shareholders of a corporation. The idea of piercing the corporate veil has been the answer to social problems that come form the principle that corporations have limited liability. When studying limited liability in the United Kingdom it can be found that the topic is regulated by case law. According to what the court has said there are two main events in which the veil can be pierced. This is either when the corporation is created to evade existing obligations, or when a single economic…show more content…
In respect to what has just been explained there appears to be a sense between the courts concepts. They started with a simple concept of the previous existing obligations and evolved through the cases to the concept of the façade. The problem of this way in which the court has evolved, is that the concept of the façade is not clear enough. Even though it has been developed in some cases, a clear concept or definition of what the court means by façade has not been made. The definitions that have been made are pure inductions that the academics like Kershaw make of the cases.

The other main event in which the court gives place to lift the corporate veil is in the case of the existence of a single economic unit. This means that a group of two or more corporations (being one the parent one) work as a single one, even though they are different companies a separate business operation does not exist. The most important cases that are taken into account when referring to this circumstance are DHN Food Distributors v Tower Hamlets LBC (1976) (case 1), Woolfson v Strathclyde Regional Council (1978) (case 2) and Adams v Cape Industries Plc (1990) (case 3). In both, case 1 and 2 the court in accordance to the facts decides that the veil should be lifted, but it does it for different reasons. In case 1 the judges decide to lift the veil because of the
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