A company is an independent legal entity, that is, distinct from its members.
Lord Macnaghten in Salomon v A Salomon & Co
Ltd that a 'company is at law a different person altogether from the
subscribers to the memorandum'. In Adams v Cape Industries Plc [1990] Ch. 433,
Justice Slade described subsidiary companies as being 'separate legal entities
with all the rights and liabilities which would normally attach to separate
legal entities' despite 'in one sense [being] creatures of their parent
companies.
There is however, exception to this.
The House of Lords in Woolfman v Strathclyde
Council held that it is the corporate veil can be pierced/lifted where the
company is merely a 'façade concealing the true facts'.
In Gilford Motor Company v Horne [1933] Ch 935 , an
injunction was granted against both Mr Horne and J.M. Horne and Co Ltd, a
company owned by his wife and a friend. It was said that the company had been
created as a 'cloak' under which Mr Horne had attempted to conceal his business
activities. Mr Horne had agreed
with his previous employment that
he would not compete and solicit clients of his previous employer.
"The defendant company is the creature of the
first defendant, a device and a sham, a mask which he holds before his face in
an attempt to avoid recognition by the eye of equity."
.. Jones v Lipman [1962] 1 WLR
Recent Decisions
The Courts in recent decision have now considered the
event of a 'puppeteer' made be
bound under a contract, which he is not privity to.
Antonio Gramsci Shipping Corp v Stepanovs [2011]
EWHC 333
VTB Capital plc v Nutritek International Corp
[2011] EWHC 3107 (Ch)
