1.
Company Law:
Unit-1
Sesión – 13

2.
Corporate
personality:
Corporate personality means that –
“the company’s liabilities are the legal
responsibility of the company and the
members will not be liable for the
company’s debts”

3.
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.

4.
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.

5.
Cont.
• The corporate entity will be disregarded only in exceptional
cases.
• This case may be divided in:
– Under Judicial Interpretation
– Under Statutory Provision

6.
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:

7.
Statutory
Provisions
1.
2.
3.
4.
Reduction Of Number Of Members:
Fraudulent Trading:
Misdescription Of The Company:
Holding And Subsidiary Companies:

8.
Lesson For LIFE

9.
Lesson For LIFE