''Gencor ACP Ltd v Dalby''
EWHC 1560 (Ch)is a UK company law">000
EWHC 1560 (Ch)is a UK company law case concerning piercing the corporate veil.
Facts
Mr Dalby was a director of the ACP group of companies, including Gencor ACP Ltd. He dishonestly diverted assets and opportunities to his British Virgin Islands company. Gencor ACP sought to force him and his company to repay the money. He also paid his son £24,000 a year for work, even though the son was still in school.
Judgment
Rimer J held that Mr Dalby and the
offshore company
The term "offshore company" or “offshore corporation” is used in at least two distinct and different ways. An offshore company may be a reference to:
* a company, group or sometimes a division thereof, which engages in offshoring business pro ...
must return the benefits. Mr Dalby could only have escaped liability if he had obtained the consent of ACP's shareholders for his actions. Both Mr Dalby and his Virgin Islands company were liable to account to ACP for the diverted money and
lifting the corporate veil
Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a Corporate personhood, separate leg ...
on the Virgin Islands company was appropriate since it was directly controlled by Mr Dalby and in reality functioned as his
offshore bank
An offshore bank is a bank regulated under international banking license (often called offshore license), which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and ...
account.
The payment to Mr Dalby's son was invalid because it was an unauthorised salary increase, in effect, for Mr Dalby. He had made the arrangement to reduce his tax liability.
See also
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UK company law
The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary legal ...
*
Lifting the corporate veil
Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a Corporate personhood, separate leg ...
Notes
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References
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United Kingdom company case law
United Kingdom corporate personality case law
2000 in case law
2000 in British law
High Court of Justice cases