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But in certain exceptional cases the Court is entitled to lift the veil of corporate entity and to pay regard to the economic realities behind the legal facade.

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.

The corporation is liable for its taxes - not the owner.

This is how corporations may sue and be sued, and their assets are tracked separately.

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.

The issue was whether Macaura had an insurable interest at the time of the loss.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.When he was killed in a flying accident, his widow sought social welfare compensation from the State, arguing that Mr. The defendant company was involved in legal proceedings but did not have enough money for legal representation.The liquidator and the other creditors objected to this, claiming that it was unfair for the person who formed and ran the company to get paid first.However, the House of Lords held that the company was a different legal person from the shareholders, and thus Mr Salomon, as a shareholder and creditor, was totally separate in law from the company A Salomon & Co Ltd.

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