When the Corporate Veil Breaks

The principle of separate legal personality (the Salomon principle) is the cornerstone of corporate law. However, in 2026, judicial rulings have made it clear: the veil is not a shroud for fraud. Courts will lift the veil if a company is used to evade legal obligations or defeat creditors.

The Accountability Mandate

Under CAMA 2020, directors face a heightened standard of care. Being a “non-executive” or “figurehead” director provides no protection against the duties codified in Sections 305–311.

• Statute vs. Private Agreements: Shareholders’ agreements are helpful, but they cannot override statutory requirements. If your agreement conflicts with CAMA 2020, the statute wins.

• Personal Liability: The Corporate Affairs Commission (CAC) is now actively pursuing directors for failures in annual filings and beneficial ownership disclosures. This exposure exists even after a company has been struck off.

Strategic Takeaways

Compliance in 2026 is personal. Directors must engage with their firm’s records, demand independent reports, and ensure that every filing is accurate.