Lifting the veil

It's often thought that individuals running a business through a company are protected from personal liability. However, a recent High Court case - Brewer v Stanley Mann, Fortis Lease UK Limited and Stanley Mann Racing Limited - reinforces the fact that this isn't always the case. In this instan

It's often thought that individuals running a business through a company are protected from personal liability. However, a recent High Court case - Brewer v Stanley Mann, Fortis Lease UK Limited and Stanley Mann Racing Limited - reinforces the fact that this isn't always the case. 

In this instance, the owner of Stanley Mann Racing Limited - Stanley Mann - was held personally liable for misdescriptions of a vintage Bentley. This was because the company name was only used on invoices and official letters (in small print at the bottom of the page) and was never referred to on the company website or adverts. In effect, the purchaser felt she was dealing directly with Stanley Mann the individual, not Stanley Mann Racing Limited, and the court agreed.

This case illuminates the risk that businesses run of 'holding themselves out' as acting in their personal capacity. The key is to make sure that the corporate identity (and the word 'limited') is used on all correspondence and adverts.
This was first published in May 2011

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