3)Assets of a company in no sense belong to other associated companies: the subsidiary is not a trustee for its property for its holding company. They can carry on their own business by owning and dealing with property themselves.
4) They can contract with outsiders or associated companies on their own behalf where the act and intention should be ascertained by that of their agent. The holding ones'' rights are confined to the share of the profits; or to the surplus assets (if any) after liquidation rather than the transaction profits arising from the contract directly.
5) A company, as a persona ficta, like any other entity recognised by law, has the capacity to commit torts and crimes through the act of its agents or servants.
As there being exceptions such as statutory ones (under-capitalisation under s118 of CA 1985; sole member in a public company under s24 of CA 1985; misuse of names under s216 of IA 1986; disqualification directors under s11 of CDDA 1986; fraudulent trading under s213 of IA 1986) and case law ones to lift the veil of single limited company, the exceptions to pierce the veil of entities in a company group exist as well. Although, of course, the author is of entirely the same opinion of the wording in Adams v Cape Industries plc (1990) that the fundamental principle is that each company is a separate legal entity possessed of legal rights and liabilities, the emphases of this essay remain upon the exceptions because that the abovementioned Salomon principle, as long as the corporate entities are created lawfully without defects, is res ipsa loquitur and applicable thereto automatically. The claimants relying upon the exceptions, on the other hand, have to bear the burden of proof and break many negative restrictions imposed by precedents in order to ignore the legal personality. In other words, all the circumstances, at least before new precedents, outside the scope of exceptions to pierce the veil, fall within the scope of the fundamental principle of legal personality self-evidently in the case of company group.
Lifting the veil
Regard should be had, in the case of circumventing the veil of group companies, to the three legal relationships: dual external relationships (affiliated companies versus transactional outsider retrospectively) and internal relationship (parent company versus its subsidiary or one subsidiary versus the other controlled by the same holding company). As for the lifting tests, in order for the protection of outside creditors, external relationships are the application field rather than the internal relationship; however, the realities of the latter are the touchstone crucial to the judgment.
