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ARTICLE · 20 SEPTEMBER 2023

Personal Liability Risk For Passive Directors

Dillon Eustace
Dillon Eustace
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Dillon Eustace

Dillon Eustace

Dillon Eustace is one of Ireland’s leading law firms focusing on asset management and investment...

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The separate legal personality of a company is a fundamental principle of Irish company law and the High Court has consistently maintained that the corporate veil will only be pierced in exceptional cases.

IrelandCorporate/Commercial Law
John O'Riordan
John O'Riordan
Rachel Turner
Rachel Turner
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The separate legal personality of a company is a fundamental principle of Irish company law and the High Court has consistently maintained that the corporate veil will only be pierced in exceptional cases. However, the High Court has shown itself willing to hold directors personally liable for the fraud of a company in certain circumstances and so directors need to ensure that they comply with their duties and exercise the necessary supervision and oversight required by the role.

Corporate Veil

A company is a separate legal entity to its directors and shareholders and as a general rule, only the company itself is liable in respect of its obligations to third parties. This central tenet of Irish law stems from the seminal English case of Salomon v A Salomon & Co. Ltd [1887] AC 22, which held that the company was separate and distinct from those who controlled it and it was irrelevant if the sole motive for setting up the company was to avail of limited liability

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