To begin with it is helpful to look at the statutory examples of lifting the veil. These are plentiful; they consist mainly of sections from the Company Act 1985 but also contain sections from the Company Directors’ Disqualification Act 1986 and the insolvency act 1986.

Firstly the Companies act 1985 contains several sections that are helpful at l

In Adam v Cape Industries plc the court rejected the “Single Economic Unit” that Cape claimed to have over the subsidiary company in America. Cape did indeed have overall control over the subsidiary company but not on a daily basis and therefore was not a “Single Economic Unit.” In the words of Judge Slade: “There is no general principal that all companies in a group of companies are to be regarded as one. On the contrary, the fundamental principal is that ‘each company in a group of companies (a relatively modern concept) is a separate legal entity possessed of separate legal rights and liabilities.

That the company was unable to fulfill. Whether there were good intentions or not should a company be insolvent upon trading then it is left to the directors to make a contribution on the company’s behalf on winding up under law. There are far more convictions for wrongful trading than fraudulent trading.

In conclusion it is clear to see under what circumstances that the courts will lift the veil of incorporation. Various circumstances arise where the courts will lift the veil of incorporation. Firstly it happens when statutory rules demand it and when case law precedent requires it. Fundamentally it is all about liability. This course of action by the courts means that the members held liable will be out with the company. Liability will never just end with the company, as per the Salomon principal, on condition that the court is happy that the required conditions are met. Evidence shown for this is from the Companies Act 1985, the insolvency act 1986 and the Company Directors Disqualification Act 1986. These are the conditions under which the courts will lift the veil of incorporation.

The second example of lifting the veil of incorporation is case law precedent. When it comes to categorizing case law this is very difficult to do. The most efficient way to categorize case law precedent is to identify certain themes that have been classified relevant. There are plentiful examples of lifting the veil of incorporation in case law.

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