The corporate veil in the United Kingdom is a metaphorical reference used in UK company law for the concept that the rights and duties of a corporation are, as a general principle, the responsibility of that company alone. Just as a natural person cannot be held legally accountable for the conduct or obligations of another person, unless they have expressly or implicitly assumed responsibility, guaranteed or indemnified the other person, as a general principle shareholders, directors and employees cannot be bound by the rights and duties of a corporation. This concept has traditionally been likened to a “veil” of separation between the legal entity of a corporation and the real people who invest their money and labour into a company’s operations.
The corporate veil in the UK is, however, capable of being “lifted”, so that the people who run the company are treated as being liable for its debts, or can benefit from its rights, in a very limited number of circumstances defined by the Courts. It generally only happens when there is wrongdoing by the people/person in control. This matters mostly when a company has gone insolvent, because unpaid creditors will wish to recover their money if they can prove wrongdoing by the people in control.
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