LAW CASES STATUE PERSON EXTRA
1. CORPORATE PERSONALITY & ‘PIERCING
THE CORPORATE VEIL’
Personality:
Salomon v Salomon 1897:
Famously and unanimously accepted that a properly formed company has its own
personality, and that it grants limited liability to its owners
Samuel Williston: a fictional legal person
Hansmann and Kraakman: Distinct from natural persons
Dignam and Lowry: humanity is not necessary for legal personality, it therefore
follow that it is possible for legal personality to be conferred on non-humans
FACTS:
Needed 7 SH in order for the company to be established, so he gave 1 share to 6
family members and kept the rest for himself as the managing D
The members of the family did not have an active role, and had no say in the
company.
DECISION:
Kay LJ in the CoA: the statutes were not intended the legalise a pretended association
for the purpose of enabling an individual to carry on his own business
HoL: Seemed like a 1-man business, but he made all the correct legal measures and
that’s all that mattered.
Para 42: distinct legal persona
Lord Macnaghten: Salomon was an agent of the company, not the company his agent
COMMENTARY:
Gregory Allan: this case is invariably still treated with reverence.
o It is widely held that this is the starting point for discussions relating to
separate corporate personality.
o It is striking to note the sheer length of time the courts have respected the
doctrine of separate corporate personality and refused to undermine limited
liability
John Lowry: cornerstone
There was some initial judicial hostility: Re London Health Elgilectrical: Lord Justice
Smith: he would wind up this kind of company and sweep it from the face of the
earth, because he was quite certain its continued existence could not benefit anyone
Halsbury: Independent person with rights
Moore: Laissez-faire approach
Collin: liability can be separate from responsibility when the person and the action are
separate
Lieu: Seminal
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1. CORPORATE PERSONALITY & ‘PIERCING
THE CORPORATE VEIL’
Personality:
Salomon v Salomon 1897:
Famously and unanimously accepted that a properly formed company has its own
personality, and that it grants limited liability to its owners
Samuel Williston: a fictional legal person
Hansmann and Kraakman: Distinct from natural persons
Dignam and Lowry: humanity is not necessary for legal personality, it therefore
follow that it is possible for legal personality to be conferred on non-humans
FACTS:
Needed 7 SH in order for the company to be established, so he gave 1 share to 6
family members and kept the rest for himself as the managing D
The members of the family did not have an active role, and had no say in the
company.
DECISION:
Kay LJ in the CoA: the statutes were not intended the legalise a pretended association
for the purpose of enabling an individual to carry on his own business
HoL: Seemed like a 1-man business, but he made all the correct legal measures and
that’s all that mattered.
Para 42: distinct legal persona
Lord Macnaghten: Salomon was an agent of the company, not the company his agent
COMMENTARY:
Gregory Allan: this case is invariably still treated with reverence.
o It is widely held that this is the starting point for discussions relating to
separate corporate personality.
o It is striking to note the sheer length of time the courts have respected the
doctrine of separate corporate personality and refused to undermine limited
liability
John Lowry: cornerstone
There was some initial judicial hostility: Re London Health Elgilectrical: Lord Justice
Smith: he would wind up this kind of company and sweep it from the face of the
earth, because he was quite certain its continued existence could not benefit anyone
Halsbury: Independent person with rights
Moore: Laissez-faire approach
Collin: liability can be separate from responsibility when the person and the action are
separate
Lieu: Seminal
Page 1 of 12
