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Separate personality means that the artificial legal person, the company, can do almost everything a human person can do; it can make contracts, employ people, borrow and pay money, sue and be sued, among other things.
The ‘veil of incorporation’ is the rather poetic term given to this separation of the company from its shareholders or members.
He sold his business to the newly formed company, A Salomon & Co Ltd, and took his payment by shares and a debenture or debt of £10,000.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.The plaintiff, who was the major shareholder and managing director of the company, sought to conduct the company’s defence.The court held that while a human person can represent him or herself in court, a legal person such as a company can only be represented by a solicitor or barrister.
He had not transferred the insurance policy to the company. After the sale, Macaura continued to insure the plantation in his own name. When Macaura attempted to claim on the policy, the company refused to pay.