Corporate veil - circumstances where this may be "pierced"

Sharanjit Pal
Mind Map by Sharanjit Pal, updated more than 1 year ago
Sharanjit Pal
Created by Sharanjit Pal about 3 years ago


Circumstances where corporate veil is pierced

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Corporate veil - circumstances where this may be "pierced"
1 Corporate veil is only lifted in exceptional circumstances where all other remedies have proved to have "no assistance" (Prest v Petrodel Resources Ltd (2013))
1.1 In cases where there is fraud or deliberate breaches of trust e.g. where company was used to carry out fraud - Re Darby, ex Brougham (1911)
1.1.1 The Supreme Court has held, that even where fraud may exist, it will not pierce veil in order to hold a person controlling a company liable as a joint contracting party for a contract which the company, and not the controller, has entered into (VTB Capital plc v Nutritek International Corp [2013] UKSC 5). ** s 399 of the CA 2006 requires certain parent companies to prepare accounts for their groups of companies as if they were single companies, one aim being to ensure that shareholders of the parent company get to see the true financial state of their company **s 214 of the IA 1986, a director of a company can be made personally liable to contribute money to the company’s assets where the company has gone into insolvent liquidation and before that happened the director knew, or ought to have concluded, that there was no reasonable prospect of avoiding insolvent liquidation
1.2 E.g. or to avoid existing obligations - Gilford Motor Co Ltd v Horne (1933
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