Corporate Veil

[scubatony]

Can anybody give me a link that will fully explain the following term;

Lifting / Piercing the Corporate Veil

I know what it generally means, but just want to read the guidelines /law relating to it.
Thanks
:beagle:<<<<< heres the bone >>>>>>

[enquirer]

Re: Corporate Veil

Company directors can generally hide behind the company (the 'corporate veil'). Very occasionally, the court will decide that liability should be imposed directly on them (for example, if they clearly used the company for criminal ends). The 'veil' is lifted and they are seen.

There is some interesting case law on this subject.

[labman]

Re: Corporate Veil

Perhaps unusually, Wiki has quite a good article about it:

http://en.wikipedia.org/wiki/Piercin...corporate_veil

[charitynjw]

Re: Corporate Veil

Latest case - Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013] UKSC 34

http://www.supremecourt.gov.uk/decid...essSummary.pdf

Here the veil was lifted.

[charitynjw]

Re: Corporate Veil

Another case, hot off the press!

http://www.lexology.com/library/deta...8-06&utm_term=

The Court of Appeal in London radically extends corporate veil piercing to confiscate shareholder assets

• Edwards Wildman Palmer LLP
• Rod J. Cowper
• United Kingdom
• July 26 2013
• 

Author page »

The Court of Appeal yesterday significantly extended the Court's power to pierce the corporate veil when making confiscation orders under the Proceeds of Crime Act 2002 ("POCA") treating the concealment principle as a separate and independent basis for piercing the veil.
In R v Sale [2013] EWCA Crim 1306 a confiscation order was made against Sale. Sale owned a contracting company and arranged for it to bribe an employee of a customer. He pleaded guilty and was sentenced to 12 months imprisonment and confiscation proceedings were brought against him on the basis that he had benefited from the crime. Section 76 of POCA provides that a person benefits from conduct if he obtains property or obtains a pecuniary advantage as a result of or in connection with the conduct. The Judge concluded that, although the benefit of the contract was obtained by the company, the corporate veil of the company should be pierced so that the entire benefit it received should be treated as having been received by Sale, its shareholder.
That decision was made before the Supreme Court gave judgment in Prest v Petrodel (which has been the subject of a couple of my previous blog posts which can be viewed here and here). The Court of Appeal, however, had the benefit of that decision in which Lord Sumption formulated the limited doctrine defining the circumstances in which the Court may pierce the corporate veil. He distinguished:
i) the concealment principle which involved "the interposition of a company or perhaps several companies so as to conceal the identity of the real actors". He said that this "is legally banal and does not involve piercing the corporate veil at all"[emphasis added]; and
ii) the evasion principle where "the court may disregard the corporate veil if there is a legal right against the person in control of it which exists independently of the company's involvement, and the company is interposed so that the separate legal personality of the company will defeat the right or frustrate its enforcement".
The Supreme Court was unanimous that the Court could only pierce the corporate veil when no alternative remedy could achieve a similar purpose. Lord Clarke put the point directly: "the court only has power to pierce the corporate veil when all the more conventional remedies have proved to be of no assistance."
Lord Clarke also said his understanding of Lord Sumption's principles meant that piercing the corporate veil "will only be done in a case of evasion, as opposed to concealment, where it is not necessary" because other conventional remedies will apply. Commentary since the Supreme Court decision has followed Lord Clarke's approach, limiting veil piercing to the evasion principle, which, it is respectfully submitted, correctly summarised the express words used by Lord Sumption emphasised above.
R v Sale is the second time the Court of Appeal has reviewed the power to pierce the corporate veil in light of the Supreme Court decision. In Antonio Gramsci Shipping v Lembergs [2013] EWCA (Civ) 730 it held that “it is clear from the decision of the Supreme Court that, in the present state of English law, the Court can only pierce the corporate veil when” the evasion principle applies.
In R v Sale the (differently constituted) Court of Appeal concluded that the evasion principle did not apply because "there was no legal obligation or liability which was evaded or frustrated by the interposition of the company… This was a company which existed long before this corrupt conduct, and which existed for bona fide trading purposes: there was no interposition of the sort described". That may prove to be a controversial limitation upon the evasion principle.
However, the most striking aspect of the decision was its treatment of the concealment principle as a separate and independent basis for piercing the corporate veil. It made no attempt to formulate an alternative legal basis for treating the assets of the company as if they were assets of its shareholder simply asserting that "what [the company] did served to hide what the [shareholder] was doing". The judgment stated that it accepted the Crown's argument which had been that "the court should treat the company's assets as belonging to the controller of the company when the company has been used for the purpose of crime".