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For example, the Court has power to disregard the corporate entity if it is used for tax evasion or to circumvent tax obligation." Appear before the House of Lords concerning the principle of lifting the corporate veil Macaura own land on which stood timber.He sold the land and timber to a company he formed and received as consideration all the fully paid shares.In this case, Mr Salomon was the major shareholder, a director, an employee and a creditor of the company he created.It is quite common in Ireland for one person to have such a variety of roles and still be a different legal entity from the company. Lee formed his crop spraying business into a limited company in which he was director, shareholder and employee. Lee was self-employed and thus not covered by the legislation. Lee and the company he had formed were separate entities, and it was possible for Mr. The following case is similar to Salomon and Lee, but the principle of separate personality worked to the disadvantage of the plaintiff.The court held that while a human person can represent him or herself in court, a legal person such as a company can only be represented by a solicitor or barrister.The principle in Salomon’s Case that a company is a legally different person from those who control it represents the current law in Ireland.For example, if I form a company called ‘Murphy & Co Ltd’ in which I own one hundred per cent of the shares and am a director and employee, legally speaking the company and myself are two distinct people.

Separate personality means that the artificial legal person, the company, can do almost everything a human person can do; it can make contracts, employ people, borrow and pay money, sue and be sued, among other things.

However, although the principle of separation is central to company law, there are a number of situations when the company and its members can be identified together and treated as the same.

These are the exceptions to the rule in Salomon’s Case, when the corporate veil is lifted and the reality of the situation is examined.

The ‘veil of incorporation’ is the rather poetic term given to this separation of the company from its shareholders or members.

This separation of a company from its members was established in the House of Lords in the famous case. Salomon had a boot manufacturing business which he decided to incorporate into a private limited company.

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