This doctrine is known as the doctrine of “lifting the veil of incorporation” or “piercing the veil of incorporation” and is present in the corporate law of many countries, including france, germany, the uk and the usa. (page 2 of 2 of personal liability for corporate debt: piercing the corporate veil) by bethany k laurence, attorney when these businesses make deals that can be considered reckless or fraudulent, a court may lift their corporate veil so that the owners' personal assets can be taken. Lifting the corporate veil is a method applied of courts to look beyond, and disregard the independent corporate legal personality, holding liability on owners, managers and staff for the obligations of the corporation or on parent corporation for the obligations of a subsidiary (howell, 2007 ohrenstein, 2010. Corporate veil the corporate veil is the liability shield that inherently attaches to the shareholders of a corporation in general, shareholders of a corporation are not personally liable for corporate debts or for torts committed by the corporation.
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 reveal the true form and character of the concerned company. Besides the statutory provisions for lifting the corporate veil, courts also do lift the corporate veil to see the real state of affairs however, even though t he legislature and the courts have in many cases now allowed the corporate veil to be lifted, it should be noted that the principle of veil of incorporation is still the rule and the. Lifting of the corporate veil means disregarding the corporate personality and looking behind the real person who are in the control of the company in other words, where a fraudulent and dishonest use is made of the legal entity, the individuals concerned will not be allowed to take shelter behind the corporate personality. Being held liable by lifting the corporate veil the majority of legal systems distinguish the corporate entity wholly from its members with the rationale to separate the company’s legal personality from the shareholders’ as the company is independent and distinct from its shareholders.
Corporate veil is the veil between company and its shareholders shareholders have right to buy and sell the shares to vote for big company decision but shareholders do not disturb company for. The terms “piercing” or “lifting the corporate veil” are often used where the courts have decided to ignore the company’s separate legal identity and find the directors or shareholders liable. Principle of lifting the corporate veil there is often talk about how a company is a person in eyes of law a company is treated as if its a human of its own kind it is given mandate to provide various kinds of information such as minutes of meetings, number of directors, list of objects for what the company is formed and others. Company law lifting of corporate veil - 5 - piercing of corporate veil piercing the veil is corporate law's most widely used doctrine to decide when a shareholder or shareholders will be held liable for obligations of the corporation. The corporate veil in the united kingdom is a metaphorical reference used in uk company law for the concept that the rights and duties of a corporation are, as a general principle, the responsibility of that company alone just as a natural person cannot be held legally accountable for the conduct or obligations of another person, unless they.
Lifting the veil: the best ever investigative history of of what's really going on behind the scenes in our world with over 500 links to reliable sources to back up the stunning picture that is painted knowledge is power. Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders usually a corporation is treated as a separate legal person,. Escorts and beyond – lifting the corporate veil about this blog a thought leadership initiative to highlight significant developments in indian corporate and commercial law that impact the corporate ecosystem and doing business in india.
But for clarity as to ‘lifting of the corporate veil’, an understanding of the corporate personality of a company is required, along with study of the provisions of indian law that pave the way for courts to pierce the corporate veil. Piercing the corporate veil is the legal jargon used to describe an action pursued against a company that ultimately leads to personal liability of the owners, shareholders, or members wherein the corporate structure is disregarded. Lifting of the corporate veil as opposed to piercing of the corporate veil for simplicity, this article will use piercing of the corporate veil to encompass both. It then sought to amend its claim to pierce the corporate veil of rap, and assert that rap was really only a puppet of the russian third parties and that they were the real parties to the contract vtb then asked permission to serve its claim outside england, with that contractual allegation included in the claim.
Jason teoh provides a commentary on a recent case on lifting the corporate veil introduction in the realm of company law, the concept of separate legal personality sits uncomfortably with the doctrine of lifting the corporate veil. Lifting of corporate veil: indian scenario a company is a juristic person, but in reality it is a group of person who are the beneficial owners of the property of the corporate body. Piercing the corporate veil is a legal phrase that describes the owners of a corporation losing the limited liability that having a corporation provides them when this happens, the owners’ personal assets can be used to satisfy business debts and liabilities.