Company Law Essay Example | Topics and Well Written Essays - 3000 words - 1

Company Law - Essay Example However, under certain circumstances, it has been identified that courts may disregard this principle. Correspondingly, corporate veil is a legal notion that separates the characteristics of a business from that of the characteristics of its shareholders, which further defends the shareholder from becoming liable for the debts and other legal obligations associated with the company. It simply signifies that the creditors of the company cannot claim personal assets of the owner; instead, they could claim only for the assets related to the entity2. In this regard, lifting the corporate veil is another legal notion of the company law enacted in the UK which is intended to signify that there is no distinction between the rights and duties of a corporate body and its members. In this context, it has been noted that, lifting the corporate veil will no longer make the owner or investors of the company to enjoy the benefits or protection as per the law related to the corporate body. Simultan eously, the notion of lifting the corporate veil will also make shareholders of the company liable for any probable debts and liability owned by the corporate body3. Based on this context, the paper will highlight the various aspects related with the company law of the UK and the reluctance of the UK courts to lift the corporate veil, except in the most exceptional cases. U.K Company Law and Corporate Veil The UK company law comprises specific standards and regulations regarding the corporate operations in the UK. One of the prime intentions of the law is to set regulations regarding the claims of the corporate body. It has been noted that there are various approaches, which companies adopt in order to conduct their business; out of which, certain approaches might not be in favour of the stakeholders of the company. In order to limit those approaches, the government of the country are often engaged in developing the company laws. The laws mainly intend to ensure proper conduct of th e companies, which are both legal as well as ethical at the same time. The companies in the UK are primarily governed under the Company Act 2006, which was recently amended in the year 2009. The updated or revised presentation of the UK company law is further observed to be quite simple as well as more flexible, which further facilitates in easy understanding of the rules and regulations by the corporate members. The revised edition of the law aims at enhancing the liabilities of the shareholders towards its various business operations4 5. Lifting the Corporate veil is one of the sections or contents of the UK company law that falls under the Companies Act 2006. It is fundamentally referred to the decision of the law, which signifies that any claim or the liability of the corporate body is separable to the members of the corporate entity. Accordingly, when a creditor of the company discovers that a debtor or the company is insolvent, the creditor of the company usually seeks to reco ver the debt from the members of the company including directors, shareholders and at times, with the associate of the company. In such scenario, when assets of the company are insufficient to meet the claims of creditors, the court may make the members of th