Lifting or piercing the corporate veil is a legal process or proceedings taken to uncover the common shield in respect of any suspicious event happened or to be happened or on the basis of allegation made or to be made against the company. 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 . It should be noted that the principle of corporate veil is still the rule and the instances of lifting of such corporate veil are exceptions to this rule. But there are cases in which the corporation's officers and shareholders could be sued for negligence or for debts the action of bringing in these shareholders to be sued is called piercing the corporate veil or lifting the corporate veil. The fundamental attribute of corporate personality, from which all other consequences flow if that the corporation is a legal entity distinct from its membe.
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. 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). 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. The standards for piercing the corporate veil and why they vary one final note on piercing the corporate veil is that states often vary radically in the extent to which they are willing to go to protect the corporation as an entity.
In this respects, the court will get through the corporate shell and apply the guideline of what is known as “lifting or piercing the corporate veil” and while by the fiction of law an organization is an unmistakable element, yet truly it is an association of people who are in reality the beneficial proprietors of all the corporate property. The legal definition of lifting the corporate veil is disregarding the general rule a corporation is a legal entity distinct from its shareholders by regarding the company as a mere agent or puppet of a controlling shareholder or parent corporation. Lifting of corporate veil by advocate sanyog vyas piercing the corporate veil - duration: 3:58 jason mance gordon 8,612 views 3:58 are corporates more powerful than states.
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. Lifting the corporate veil: incorporation by registration was introduced in 1844 and the doctrine of limited liability followed in 1855subsequently in 1897. The doctrine of lifting the corporate veil owes its origin to the concepts of separate legal entity and limited liability the company is an entity different from its shareholders the company is an entity different from its shareholders. 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 . Lifting the corporate veil 1 lifting of corporate veil and exceptions saumya singh 1321760 christ university 2 concept a company is a legal person with a separate entity this shows that there is a veil drawn between the company and its members lifting the corporate veil is an exception to the concept of separate legal entity.
Doctrine of lifting of corporate veil perspective in taxation cases by nikhil singal and aditya bhattacharya “the company is at law a different person altogether from the. 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. 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.
When this happens it's called piercing the corporate veil if an unpaid creditor sues for payment a court might pierce the corporate veil (lift the . The corporate veil exists to distinguish a company as a legal person separate from its shareholders however, where the relevant test has been satisfied, the courts have shown a willingness to pierce the veil. The corporate veil discusses about the meaning of lifting or piercing of the corporate veil and judicial provisions or grounds for lifting the veil.
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 this concept doesn’t apply only . 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 . 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 . 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.