ABSTRACT
The corporate veil, as distinct from the assassin’s cloak, is the protection a company gives to the individuals who are its directors and shareholders. The corporate veil separates the company as a legal entity from its directors and shareholders as individuals, and only in extreme circumstances will the courts allow the corporate veil to be pierced. Thanks to the corporate veil, a company can go into a form of insolvency with no effect on the directors or shareholders personally unless: ❍ the shareholders have already contracted to pay
more share capital than they have already paid, in which case they may be asked to pay the extra; or
❍ the directors have given guarantees (more about this on p 20); or
❍ the directors have misbehaved – see ‘Dodgy dealings’, p 67.
