Make an enquiry

    Enquiry Form









    Contact

      Enquiry Form






      Supporting Document


      We are welcoming clients back to our offices Find Out More
      FJG Solicitors in Essex, Colchester, Chelmsford, London – Fisher Jones Greenwood
      • 0845 543 5700
      • [email protected]
      • Make an enquiry
      • Online Payment
      • Home
      • Services
        • Services for you
          • Advocacy
          • Civil & Commercial Disputes
          • Clinical and Medical Negligence
          • Conveyancing
          • Employment Law
          • Family Law
          • Children Law
          • Immigration & Visas
          • Notary Services
          • Personal Injury
          • Wills, Life Planning & Probate
        • Services for business
          • Academies Portal
          • Agricultural and Rural
          • Business Immigration
          • Commercial Dispute Resolution
          • Commercial Litigation
          • Professional Negligence
          • Commercial Property
          • Construction Law
          • Planning Consultancy
          • Corporate and Commercial
          • Education Services
          • Employment Law
          • Healthcare Services
          • International Services
          • Landlord & Tenant Services
        • Services by sector
          • Agriculture & Estates
          • Care Homes
          • Charities & Social Enterprise
          • Construction
          • Education Law
          • Energy
          • Family Owned Business
          • Healthcare & Dentistry
      • Our people
      • About us
        • CSR
        • Awards
        • Our Vision
        • Accessibility
        • Careers
        • Work Experience
        • Equality & Diversity
        • FLOCC
        • FJG Foundation
        • SAFE Forum
      • News, Events & Insights
      • Blog
      • Podcasts
      • Contact us
        • Colchester
        • Chelmsford
        • Clacton-on-Sea
        • Billericay
        • Braintree
        • Frinton-on-Sea
        • Holland-on-Sea
        • London

      Piercing the Corporate Veil

      11 October 2013 by Tony Fisher

      Tony Fisher

      ‘Piercing the corporate veil’ is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed. Common law countries (such as the jurisdiction of England and Wales) usually uphold this principle of separate personhood, but in exceptional situations may ‘pierce’ or ‘lift’ the corporate veil.

      While it has widely been held that ‘piercing the corporate veil’ could only occur in very limited circumstances it appears that those circumstances may have recently been widened. This case is the first time that the House of Lords or Supreme Court has held that a court may, in certain circumstances, pierce the corporate veil, in the absence of specific statutory authority to do so.

      In Prest v Petrodel Resources Ltd & Ors, the Supreme Court discussed the principle of English law which enables a court in very limited circumstances to pierce the corporate veil. This can only happen when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. When this occurs the court may then ‘pierce the corporate veil’ for the purpose of depriving the company (or its controller) of the advantage which they would otherwise have obtained by the company’s separate legal personality.

      In his leading judgment, Lord Sumption highlighted that the principle had no application in the present case but sought to give some clarification on how and when the courts would look to use this power.

      In the present case a wife had sought an order, in ancillary relief proceedings following a divorce, for the transfer to her of properties owned by companies. The companies were wholly owned and controlled by the husband. The husband had misapplied the assets of his companies for his own benefit, but in doing so he had neither concealed nor evaded any legal obligation owed to his wife. In addition he was not guilty of concealing or evaded the law relating to the distribution of assets of a marriage upon its dissolution.

      The legal interest in the properties had been vested in the companies long before the marriage broke up. Whatever the husband’s reasons for organising things in that way, there was no evidence that he had been seeking to avoid any obligation relevant in these proceedings. It followed that the piercing of the corporate veil could not be justified here by reference to any general principle of law, but the raising of the issue shows that a court can bear it in mind if it sees evidence of wrongdoing. Even without the other party relying on relevant case law.

      Source: Practical Law

      Authors
      Archives
      Subscribe to RSS feed

      Recent Posts

      • Worth the wait
      • What is a section 37 report?
      • What is a section 7 report?
      @FJGSolicitors

      We've had a 5* review from Zoe: Moving home https://t.co/4lbJehtq0g

      19 hours

      RT @MistleyCC: How good did the new T20 kit look on Thursday?! 🔥 A massive thanks to @FJGSolicitors for sponsoring our kit this year! https…

      1 day

      We've had a 5* review from Nicholas: EXCELLENT ADVICE AND VERY EFFICIENT https://t.co/4lbJehtq0g

      2 days
      Billericay 01277 623132
      Braintree 01376 552828
      Chelmsford 01245 890110
      Colchester 01206 835300
      Clacton 01255 323103
      Frinton 01255 514100
      Holland-on-Sea 01255 818900
      London 08455 435700
      Sudbury 01787 373387
      • Disclaimer
      • Accessibility
      • Terms & Conditions
      • Privacy Policy
      • Cookies
      • Price & Service
      • Signup to our Newsletter
      • COVID-19 Risk Assessment

      Fisher Jones Greenwood is the trading name of Fisher Jones Greenwood LLP, a Limited Liability Partnership authorised and regulated by the Solicitors Regulation Authority and registered in England ( Number: OC305854 ). A list of members is available for inspection at the registered office at Charter Court, Newcomen Way, Colchester Business Park, Colchester, Essex CO4 9YA

      This website uses cookies & data collection

      Our website uses cookies, which are small text files that are placed on your computer by websites that you visit to distinguish you from other users. They are widely used in order to help website owners like us provide you with the best user experience possible. They also provide us with information that can help us improve our websites and marketing activities. By clicking an item or link on this website, you agree to the use of cookies and other data collection.

      Find out more

      We are welcoming clients back to our offices

      Differing tiers and three lockdowns later, Fisher Jones Greenwood Solicitors are now pleased to be able to welcome clients safely back to our offices.

      Remote working and the digitalisation of the way we work, have been key to keeping FJG and the rest of the country going.

      • We are now able to offer, pre-booked face-to-face appointments. Although, we are still able to offer remote appointments if preferred.
      • You can continue to visit our offices at any time to post any correspondence and documents through letterboxes.

      If you are visiting an FJG office, covid-19 safety rules of social distancing, hand sanitization, and the wearing of masks will still apply.

      • Please be aware you will also need to have your temperature taken on arrival.
      • There will also be protective screens in place to protect you and our staff.

      Please do not hesitate to contact your legal adviser by email or by telephone should you have any worries or concerns. Alternatively, please call our main switchboard number (01206 835300), and a message to return your call will be relayed to the relevant person.

      Best wishes
      Paula Cameron
      Managing Partner