Why a company is a person in its own right, and when those behind it — shareholders, partners, parents and directors — can nonetheless be made to answer for its obligations.
Almost every rule in company law rests on the foundation laid in Salomon: the company stands apart from the people who own and run it. This chapter begins with what separate legal personality means and how it differs from limited liability, then surveys the main business entities in England and Wales and the exposure of their members — shareholders, guarantors, general partners and LLP members. It moves on to the contracts made before a company exists and who is bound by them, the position of parent companies for their subsidiaries' liabilities, and the narrow circumstances in which the corporate veil can be pierced. It closes with the statutory routes to personal liability for directors, including wrongful and fraudulent trading, and how criminal liability is attributed to a company that has no mind of its own.
