From its inceptions in the late Middle Ages, the incorporation of business activities has remained an area of controversy both in legal scholarship and the political and social sciences. In the early days of the twentieth century, Ambrose Bierce wrote in his Devil’s Dictionary, that a corporation is ‘an ingenious device to obtain profit without individual responsibility.’ On many levels, this satirical statement captures the practical realities behind the concept of separate legal personality, limited liability and the veil of incorporation. This essay will examine these doctrines from both traditional theoretical perspectives and critical perspectives, with an emphasis upon the implications for these doctrines to the development of jurisprudence related to corporate groups.
This essay will begin with an introduction to the doctrines of separate legal personality and limited liability, their basis in the general law as well as those relevant sections of the Corporations Act 2001 (Cth) (‘CA’) which affirm them. I will then turn to an examination of the doctrine of the corporate veil, from a traditional theoretical framework in concession and contractarian theories, including a discussion of some of the reasons behind the court’s reluctance to pierce or lift the corporate veil. This will lead into a discussion of the several areas where the courts have decided to pierce or lift the corporate veil in the general law.
Following on from this, I will turn to discuss several critical theories of the corporation – communitarian theories and CSR, feminist critiques of the corporation and Islamic jurisprudence and its relevance to international corporate activities. Thus, I hope to shed light on the potential for recognising theoretical plurality in our understanding of corporate law jurisprudence in Australia.Continue reading “A Critical Examination of the Doctrine of Separate Legal Personality and Piercing/Lifting the Corporate Veil”