For all intents and purposes, all acts taken by these two company types are taken by the owners themselves.The company becomes a legal person in its own right, distinct from the This was seen in the famous case of Salomon v Salomon & Co Ltd (1897).But in certain exceptional cases the Court is entitled to lift the veil of corporate entity and to pay regard to the economic realities behind the legal facade.For example, the Court has power to disregard the corporate entity if it is used for tax evasion or to circumvent tax obligation." Appear before the House of Lords concerning the principle of lifting the corporate veil Macaura own land on which stood timber.Macaura's case is depending upon the fact that Company whether private or public is distinct from his owner if he took the policy from insurance company at the name of company then he could claim for damages. Only Macaura’s company, as owner of the timber, which had the requisite insurable interest in it.Only the company, and not Macaura, could insure its property against loss or damage.
It was held that As soon as citizens form a company, the rights guaranteed to them by article 19(1)c has been exercised and no restraint has been placed on the right and no infringement of that right is made.A corporation is a separate legal entity from its owners.In other words, if a corporation, in the course of doing business, is involved in any legal action, then the corporation, for legal purposes, is its own person.He sold the land and timber to a company he formed and received as consideration all the fully paid shares.The company carried the business of felling and milling timber. Macaura had earlier insured the timber against loss of by fire in his own name. He subsequently sold the plantation to a company of which he was the only shareholder, through the purchase money remained owing to him.