How is the veil of a company lifted?

How is the veil of a company lifted?

Lifting the veil occurs where the courts or law disregard the corporate personality of the company in deserving circumstances. He then stated that; the directors and managers represent the directing mind and their action can be treated as that of the company. See also-Faith Entreprises Ltd V BASF Nigeria Ltd.

In which of the following corporate veil can be lifted?

(i) Judicial Grounds: The courts in India can lift the corporate veil on certain grounds on the following grounds: (a) Fraud Improper Conduct: One of the most common grounds for the lifting of corporate veils, in cases wherein the shareholders of the company are indulging in fraudulent acts.

What is meant by lifting the veil of incorporation?

ABSTRACT. From the juristic point of view, a company is a legal person distinct from its members [Salomon v. But, in a number of circumstances, the Court will pierce the corporate veil or will ignore the corporate veil to reach the person behind the veil or to reveal the true form and character of the concerned company …

Which are the circumstances when the corporate veil is lifted pierced under the Companies Act 2013 as well as by the judiciary?

Judicial Provisions Or Grounds For Lifting The Veil- FRAUD OR IMPROPER CONDUCT- The Courts have been more that prepared to pierce the corporate veil when it fells that fraud is or could be perpetrated behind the veil. The Courts will not allow the Salomon principal to be used as an engine of fraud.

Under what circumstances the corporate veil may be lifted by the courts explain with the help of relevant case laws?

The Court held that the veil of corporate entity could be lifted by adjudicating authorities so as to determine as to which of the directors was concerned with the evasion of the excise duty by reason of fraud, concealment or willful mis-statement or suppression of facts or contravention of the provisions of the act …

What are the exceptions of lifting of corporate veil?

However, in certain circumstances, such veil may be lifted by a court order where a fraudulent and misleading use is made of the legal entity as an exception of the principle of a separation and limited liability principle.

When can corporate veil be lifted under Companies Act 2013?

Where the conduct of the company is in conflict with public interest or public policies, Courts are empowered to lift the veil and personally hold such persons liable who are guilty of the act. To protect public policy is a just ground for lifting the corporate personality. One such scenario is Jyoti Limited vs.

What is lifting of corporate veil under Companies Act 2013?

Lifting or piercing of corporate veil means ignoring the fact that a company is a separate legal entity and has a separate identity (Corporate personality). This concept disregards the separate identity of the company and looks behind the true owners or real persons who are in control of the company.

What is lifting of corporate veil?

Which is not exception to lifting of corporate veil?

The liquidator personal liability is limited to the amount notified by the Income Tax officer under section 178 (2) if so notified. This is strictly not a case of lifting the corporate veil but one where for non- compliance with certain provisions in the I.T.

When does the doctrine of lifting the corporate veil apply?

There are certain instances in which justice cannot be made until the corporate veil is lifted. The main instances where the doctrine of lifting the corporate veil is applied are as follows: Determination of Real Character of a Company/ Trading With the Enemy: A company is an artificial person. It has no nationality.

Is the corporate veil lifting in India and England?

Consequently, the Courts, both in India and England, if circumstances demanded so, have lifted corporate veil and identified the company with its members. In other words, the Courts, in compelling situations, ignored all the conceptions of the corporate personality and hold the directors and shareholders personally liable.

Is the veil of incorporation sacrosanct?

In Adeyemi V Lan and Baker (Nig) Ltd, the court held that there is nothing sacrosanct about the veil of incorporation. The veil shall be lifted to prevent the avoidance of recognition by the eyes of equity. In Lennards Carrying Co V Asiatic Petroleum, the court noted that a corporation is an abstraction.

Can a court draw aside the veil of Corporation?

LIFTING THE VEIL OF INCORPORATION. Lord Denning in Littlewoods Mail Order Stores Ltd V IRC noted that “ the doctrine in Salomon V Salomon has to be watched very carefully”… “courts can often draw aside the veil… to see what really lies behind ”.