Gayatri
Asked November 27, 2013

Lifting the Corporate Veil

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What is meant by Lifting the Corporate Veil?

Answer 1

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Saumya Kumar

In corporate law, the company is treated as a separate legal entity with no association to the owner or the manager of the company. In the case of Solomon v. Solomon it was identified that there is a veil which creates the company and separates it from its owners. Therefore after the creation of a company, the company is responsible for the work done like payment of dues, contractual obligations etc. Sometimes, in case of an illegal activity, where the owner of the company is doing illegal activities under the garb of the corporate veil then the Courts have lifted the corporate veil to hold the owner liable for the illegal activity. 

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