The effect of the Salomon principle is that a duly incorporated company is viewed as a separate legal entity from its controller(s) and/or shareholder(s) upon incorporation. This principle is also known as the Veil of Incorporation. There are circumstances however where the courts will disregard the separate legal personality of a company and thereby the treat the company and its controller(s) and/or shareholder(s) as one legal entity.

Explain the principal circumstances under statute and common law in which the Veil of Incorporation may be lifted and the separate legal personality of a company disregarded.

1000-word essay answer for a second-year undergraduate business law student.