R v Boyle Transport (Northern Ireland) Ltd is a confiscation case of special importance. the scope. Cookie Policy. It explains the two primary arguments used to prove piercing claims, the alter ego theory, and the agency theory, and examines what parent companies can do to limit their exposure to the liabilities of their subsidiaries. The issue on the appeal was whether that finding and the basis for granting the Enforcement Receivership was correct. This case established that a company has a separate legal identity than that of its shareholders. Our expert team are ready to discuss your needs. Piercing the Corporate Veil. Irish courts have, to date, tiptoed around piercing the corporate veil in separation and divorce cases. 2. endstream endobj startxref The best way to pierce the corporate veil is to prove the existence of fraud. Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. Sign in Register; Hide. Many legal commentators believe the decision could have a chilling effect on litigation by companies as directors are normally considered protected against costs liability as a result of the corporate veil. Harry Hewitt and James Fletcher gave a talk at a Proceeds of Crime conference on Thursday 1 December 2011. As in Campbell v Gordon , the court could find no authority for the proposition that a person could be made indirectly liable for breach of an obligation imposed by statute on another. Legal background. 0 endstream endobj 504 0 obj <. Piercing The Corporate Veil. New York Law will not allow the corporate veil to be pierced absent a showing that defendant’s domination was used to commit fraud or another wrong. They spoke about piercing the corporate veil and tainted gifts and included scenarios for the delegates to work through. In this context, ‘piercing of corporate veil’ describes situations wherein the separate entity principle may be deemed unfair and the courts may make decisions contrary to this principle on various grounds. 11 ibid (emphasis in original). Piercing the Corporate Veil by Karen Vandekerckhove and Publisher Kluwer Law International B.V. Save up to 80% by choosing the eTextbook option for ISBN: 9789041155610, 9041155619. Company - Piercing the corporate veil Piercing the corporate veil. Instead, the creditors turn to the shareholders personal properties, homes, other investments, and bank accounts to clear their business debts. 3. Despite the seemingly categorical statement made by Lord Halsbury in Salomon’s case, a few years later, the English court held that in certain situations it was permissible to disregard this principle and to ‘pierce the corporate veil’ (Mugambwa 2007). On the one hand, courts understand the fact that the corporate form is supposed to be a juridical entity with the characteristic of legal “personhood.” As such courts acknowledge that their equitable authority to pierce the corporate veil is to be exercised […] If a court pierces a company's corporate veil, the owners, shareholders, or members of a corporation or LLC can be held personally liable for corporate debts. Piercing the corporate veil is the legal jargon used to describe an action pursued against a company that ultimately leads to personal liability of the owners, shareholders, or members wherein the corporate structure is disregarded. Lifting the veil allows a Court to look behind the separate legal personality of the company and attribute liability to the promotors of the company in their personal capacity. 10 ibid. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of … Yasmin Prest appealed her case to the UK Supreme Court (“SC”). The veil may only be pierced where it is the only way to deprive a company or the individual controlling it of an advantage that would otherwise accrue from the controlling party’s use of the company’s legal personality to deliberately evade or frustrate the controlling party’s existing legal Fortunately, the courts in Florida are reluctant to take the drastic step of piercing the corporate veil. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may "pierce" or "lift" the corporate veil. Terms of Use  |  Traditionally, directors in companies are considered to be protected against costs liability as a result of ‘the corporate veil’. 8. R. B., Piercing the Corporate Veil: An Empirical Study, Cornell Law Review 76 (1991), S. 1036 ff. Evasion of Legal Duty. The principal, as set out by the House of Lords in Solomon v Solomon, has been consistently upheld by the Irish Courts over the years. Money diversion to render a corporation judgment-proof always constitutes a wrong for the purposes of determining whether the veil should be pierced. Module. The typical veil-piercing case involves a creditor suing an individual who has used the corporate entity as an instrument of fraud. The current and ever changing COVID-19 crisis means that Sellors Solicitors is now an online virtual full service law firm relying on best in class technology to help our clients navigate very challenging legal issues in Limerick, the Mid West and beyond. Confiscation - Piercing the Corporate Veil in Criminal Cases: R v Boyle Transport (Northern Ireland) Ltd, Patrick Boyle & Mark Boyle. Company Law - Piercing the Corporate Veil 1. 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