The Misuse and Abuse of the Corporate Form

Abstract

This paper suggests that there has been little abuse of the corporate form as a proprietary institution. What abuse as there is usually relates to the corporation being used as a unlawful wealth protection device (which should be the preserve of trusts and its perpetuity/accumulation rules) as opposed to one carrying on a business producing goods and services, or perhaps a specific stage in a company’s existence where the separate fund is violated and/or the corporate nomenclature misused in a way which benefits one corporate constituent over another. The former is met by the narrow doctrine of veil piercing and the latter by various rules that may reflect the duty to act for proper purposes, as this counteracts an appeal to the company’s best interests when this is inappropriate.

Keywords: Company law, Separate personality, Lifting the veil, Asset partitioning, Capital maintenance, Insolvency, Takeovers, Proper purposes