Piercing the Corporate Veil

Since the inauguration of Salomon v. Salomon which reveals the company 's veil, individual legal personality has been recognized for a long time by British law for centuries. In other words, a limited liability company has its own legal identity different from its shareholders and directors. However, in some cases, the court can prepare to follow the company based on the behavior of its directors and shareholders. This is called "opening the company's veil." There are many cases about "opening the veil of a company", but among them Jones v. Lipman [1] is a typical example.

The court will use the principle "announce the veil of the company" to announce the veil of the company. If there is no other entity with the member, the court reveals the company's veil and takes action. Later, the court will give the company and its members accountability for breach of contract. The veil of the company can be canceled according to the conditions stipulated in the statutory provisions and the judicial interpretation based on the common law. For example, in Article 36 of the Corporate Law of 1965, if the number of members of a company has been reduced to less than two people and its operation period exceeds six months, those who became members of the company during the membership period of the company will be within six months . Personally responsible for all obligations signed by the company in the last six months from work, it may be prosecuted for this reason.

When deciding whether to announce a veil, the court should 'strictly obey the purpose of FHA'. 1 Fletcher Cyclopedia, ibid., § 41.90, 698; Also see also 95 Harv, "Revoking egoism according to federal practice" which unveiled the veil of companies. L. Rev. 853, 859 - 64, 871 (1982) (Motivation to penetrate the veil should open the policy of the specific federal regulation concerned). "Under federal common law, it may be deprived of fairness because it is used to defeat the highest priority public policy." 1 Fletcher Cyclopedia, ibid.

US Supreme Court --------------------------------- TM | -------- ---- ---------------------

Robert C. Downs, who exposes the veil of the company to provide limited personal responsibility? 53 Umkc L. Rev. 174 (1985) (Fair "open the veil of the company" allowing the court to protect the interests of the creditors by giving personal responsibility to the officers, officers or controlling shareholders of the company Investor's personal asset, coupled with the lack of business capital, there is a possibility that the veil of the company may also have a hole. Traditionally, the company's veil is also punctured and senior staff Or the director may become illegal or may not follow the physical procedure.]