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Essay from the year 2024 in the subject Law - Miscellaneous, grade: -, , language: English, abstract: The Salomon v Salomon & Co Ltd [1897] decision established the principle of separate legal personality, granting duly incorporated companies distinct identities from their owners. This landmark judgement hailed as a cornerstone of modern business, empowered companies to attract investment and expand through limited liability protections for shareholders. This "corporate veil" fostered economic growth and entrepreneurial spirit. However, concerns emerged about potential abuse and limitations on accountability. Unlimited liability shielded individuals from responsibility for their actions, potentially enabling injustice and even fraud. Recognizing these concerns, courts have developed exceptions to pierce the veil in specific situations, such as injustice, unfairness, agency, group enterprise, tax evasion, and concealment 'façade or sham'. Legislations, such as the Companies Act and Insolvency Act offer additional frameworks regarding fraudulent trading and wrongful trading. This Article critically analyzes the principle, exploring its benefits and drawbacks. It proposes reforms to address emerging issues, such as human rights abuses, environmental damage, and algorithmic bias while striving for a balance between promoting responsible corporate conduct and fostering a dynamic economy. Ultimately, this Article advocates for ongoing dialogue and nuanced solutions to ensure the principle serves the interests of businesses, investors, and society at large.
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