For the courts to lift the veil of incorporation there has to be a reason for the courts to do this. There are two main reasons why the courts would pursue this act; firstly it could be because the statutory rules have been broken and the courts must take action and also because of case law. When a specific act happened in the past and the courts came to a decision then this occurrence happened again, the courts must be consistent in their decision and meet wrongful acts with the same diligence and punishment. Secondly it could be because case law precedent requires it. It is also helpful to look at what the Salomon principal is as this directly links to the veil of incorporation. The Salomon principal is an upheld statute that can at times have serious results. As with the Irish case Macaura v Northern Insurance Company Ltd [1925] AC 619. .
To begin with it is helpful to look at the statutory examples of lifting the veil. These are plentiful; they consist mainly of sections from the Company Act 1985 but also contain sections from the Company Directors' Disqualification Act 1986 and the insolvency act 1986. .
Firstly the Companies act 1985 contains several sections that are helpful at lifting the veil of incorporation. Section 349(4) should in an event where an officer of a company describes the company incorrectly; in essence misleading the public, and then the officer is liable should the company be unable to credit any needed requisite. For a fine example of this then case law provides Penrose v Martyr (1858) what happened in this case was that a companies secretary accepted a bill of exchange, this bill was drawn on the company however the companies name itself was incorrectly spelt. "Ltd- was missing and as such was misleading to other parties. Through a default in the company the motion was held that the company's secretary was personally responsible and therefore liable for the bill.