An Analysis of the Doctrine of Piercing the Corporate Veil in Nigerian Company Law

The doctrine of piercing the corporate veil is an exception to the Salomon principle of separate corporate personality, allowing courts to impose personal liability on shareholders and directors in cases of fraud, sham, or unconscionable conduct. This study analyses how Nigerian courts have applied and developed this doctrine through decided cases, with particular reference to companies registered under the Companies and Allied Matters Act 2020. A doctrinal methodology was adopted, examining approximately 30 relevant judicial decisions from the Supreme Court, Court of Appeal, and Federal High Court from 2015 to 2023. The study also examines statutory inroads to separate personality under CAMA 2020, including sections on fraudulent trading, wrongful trading, and directors disqualification. Results indicate that Nigerian courts have applied the doctrine inconsistently, with some decisions favouring a conservative approach that rarely pierces the veil outside obvious fraud while others adopt a broader judicial discretion-based approach. The CAMA 2020 provisions have introduced statutory grounds for personal liability that partially reduce reliance on equitable veil-piercing. The study concludes that judicial uncertainty in this area creates unpredictability for corporate practice and recommends legislative clarification of the conditions for veil-piercing, including codification of the agency, fraud, and single economic unit doctrines in a revised Companies Act.

Keywords: corporate veil, Salomon principle, CAMA 2020, corporate personality, directors liability