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UK · Year 3 · Company Law

Personality & Directors

Salomon, the veil and directors' duties.

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  1. 1.Salomon v A Salomon & Co Ltd [1897] — principle?

    A properly incorporated company is a separate legal person from its members.

    [1897] AC 22 (HL)

  2. 2.Prest v Petrodel Resources [2013] — when can the veil be pierced?

    Only where a person under an existing legal obligation deliberately evades it, or frustrates its enforcement, by interposing a company under their control (the evasion principle).

    [2013] UKSC 34

  3. 3.Companies Act 2006, ss 171–177 — the general duties?

    Act within powers; promote the success of the company; exercise independent judgment; reasonable care, skill and diligence; avoid conflicts of interest; not accept benefits from third parties; declare interest in proposed transactions.

    CA 2006, ss 171–177

  4. 4.Foss v Harbottle (1843) — rule?

    The proper claimant for a wrong done to the company is the company itself. Statutory derivative claims are now in CA 2006, Part 11.

    (1843) 2 Hare 461

  5. 5.Companies Act 2006, s 994?

    A member may petition on the ground that the company's affairs are being conducted in a manner unfairly prejudicial to members' interests.

    CA 2006, s 994

  6. 6.Insolvency Act 1986, s 214?

    Wrongful trading: a director may be ordered to contribute where they knew or ought to have concluded there was no reasonable prospect of avoiding insolvent liquidation or administration.

    IA 1986, s 214