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1 Introduction
Historically, corporate personality arose from the activities of organisations such as religious orders which were granted rights to hold property and to sue and be sued in their own right ([1] Dewey, 1926). In the eighteenth century, the concept began to be applied to commercial entities involved in rail building and colonial trade ([2] Williston, 1888). By far the most significant legal reform in company law arrived in 1844 with the enactment of the Joint Stock Companies Act[1] . It brought a system for simple incorporation of a company by registration. The Act granted companies full legal personality upon registration. However, the Joint Stock Companies Act did not come with limited liability for members of joint stock companies. This feature arrived in 1855 under the Limited Liability Act[2] , which was hurriedly replaced by the Joint Stock Companies Act 1856. The Act limited the liability of members to the amount they have invested in the company ([3] Machen, 1910). The company was given legal personality which divorced it from its founding members and thus considered an entity by law upon incorporation. Limited liability reduced the risk faced by the promoters by limiting their loss only to the amount invested in the company. However, both corporate personality and limited liability have remained highly debated issues to this day ([4] James, 2003).
Ever since the House of Lords landscape-shaping decision in Salomon v. A. Salomon Ltd [3] , over a century ago, there has been a number of legal development aimed at sidestepping the doctrine of corporate personality and exposing the innards of the company. While statutory exceptions to the doctrine have a long history, common law has only just started to gather pace in the past three decades. A reminder of the statutory and common law exceptions to the corporate personality doctrine, taking into consideration all recent developments, is indeed a much-welcomed move, in an ever changing business landscape. This paper explores the statutory and common law exceptions to the separate personality doctrine.
The landmark decision of the House of Lords in Salomon v. A. Salomon & Co. Ltd [3] cemented both limited liability and corporate personality in English company law. It did not matter whether Mr Salomon was the sole controlling member...