4. Meaning Of Lifting Of
The Corporate Veil
• Doctrine of Lifting the Veil:
[Dec.: 2012]
› When a Company registered under the act, all the dealings with
the company will be in the name of company, and the members
will be disregarded.
› This shows that there is a veil drawn between the company and
its members.
› This veil is partition or curtain between the co. & its members.
› Following this principle the Courts in most cases have refused to
go behind the curtain & see who are the real persons composing
the company.
5. Cont.
But sometimes the necessity of the situation may compel the
authorities to disregard the corporate legal entity & look to
individual members who are in fact the real beneficial owners of
all corporate property;
And this fact known as……..
Case - Lee v/s Lee’s Air Farming Ltd.
Case – Abdul Haq v/s Das Mal
The Court will Lift the veil where it is essential to secure justice,
in public interest or for the benefit of revenue. But it must be keep
in mind that a separate legal entity is still a general rule.
6. Cont.
• The corporate entity will be disregarded only in exceptional
cases.
• This case may be divided in:
– Under Judicial Interpretation
– Under Statutory Provision
7. Judicial Provisions
1.
2.
3.
4.
5.
6.
7.
Fraud Or Improper Conduct:
For Benefit Of Revenue:
Enemy Character:
Company Avoiding Legal Obligations:
Single Economic Entity:
Agency Or Trust:
Public Interest:
