Overview of Piercing the Corporate Veil
The corporate veil is lifted by the court in specific circumstances to reveal the true actors behind the company and prevent abuse of legal personality. The Salomon principle establishes the independence of companies within a group, emphasizing their separate liability.
Factors and Cases Related to Piercing the Corporate Veil
- Conduct Conflicting with Public Interest
- Example: Jyoti Limited vs. BSN (UK) Ltd. and Others vs Janardan Mohandas Rajan Pillai (1996)
- Illegality and Shareholder Motives
- Example: Premlata Bhatia vs Union of India (2004)
Instances and Implications of Lifting the Corporate Veil
- Inspecting the Corporate Nature
- Case Analysis: Woolfson v. Strathclyde
- Personal Liability and Separate Legal Entity
- Evolution of the Concept
Actions Leading to Lifting the Corporate Veil
The court lifts the corporate veil when necessary, particularly in defence proceedings or cases related to wrongdoing in tax matters or tax evasion. It examines the realities of the situation, considering statutory and court-ordered lifting provisions.