LIFTING THE CORPORATE VEIL

MANISH MAHAJAN B.B.A - III

CONTENTS
INTRODUCTION
LIFTING THE VEIL

JUDICIAL INTERPRETATIONS
STATUTORY EXCEPTIONS

INTRODUCTION
A company is a legal person and is distinct from

its members, and can sue and be sued in its own name.
There is a fictional veil between the company and

its members, i.e,the company has a corporate personality which is distinct from its members.

Solomon v. Salomon & Co. Ltd

Salomon sold his business to a new company . Company wound up, its assets were found to be worth 6,000 and its liabilities amounted to 17,000 of which

10,000 were due to Salomon and 7,000 were due to

unsecured creditors. The unsecured creditors claimed that Salomon and the company were one and the same person and, therefore, they should be paid in preference to Salomon..

LIFTING THE CORPORATE VEIL

The circumstances under which courts may lift the corporate veil are divided in to two heads : Judicial Interpretations Statutory Exceptions

JUDICIAL INTERPRETATIONS
Determination of character
Daimler co ltd v. Continental tyre & rubber co.

Ltd

Prevention of fraud or improper conduct

Gilford motor co. Ltd. V. Horne (1933)

JUDICIAL INTERPRETATIONS
Avoidance of welfare legislation
Workmen of associated rubber industry v.

Associated rubber co.

Protection of revenue
Dinshaw Maneckjee Petit

STATUTORY EXCEPTIONS
Reduction of number of members
(section 45)

Failure to refund application money

(section 69(5))

STATUTORY EXCEPTIONS
Investigation of companys affairs
(section 167)

Misdescription of companys name

(section 147(4)) L & R agencies ltd.

THANK YOU