SYNOPYSIS FOR DISSERTATION:

TITLE OF TOPIC LIFTING OF CORPORATE VEIL: A

COMPARATIVE ANALYSIS OF INDIA, U.S.AND U.K.

Abstract

A corporation is clothed with a legal personality. The personality of corporation is

different from that of its members. It is an exclusive creation of law having no existence
apart from its individual members who form the corporate group and whose acts by
fiction are attributed to the corporate entity. As a result of this change in the
membership does not affect the existence of corporation or its unity. If it is assumed that
the will of the corporation is attributed to it by fiction of law then it leads one to infer
that it is always lawful as will attributed by law can never be unlawful or illegal.
Therefore it follows that the corporation can never be indulged into acts which are ultra
vires .

Introduction: The most fundamental Principle of a company law is its corporate

personality. It is on this quintessential and elemental principle that which makes a company
an entity which is entirely distinct from its shareholders, promoters, directors etc. Thus, when
a company is incorporated, a legal entity gets created, which is separate from its members,
employees, shareholders, directors, promoters etc., which has led to the concept of corporate
veil. The purpose of establishing this doctrine was to provide business efficacy and
convenience. The main stimulation behind the formation of a corporation or a company is the
limited liability which is offered to its shareholders and because of this limited liability, the
liability of each shareholder is limited only what he or she has contributed as shares to the
company. In the doctrine of Lifting the Corporate Veil, the law goes behind the mask or veil
of incorporation to determine the real person or group of people behind the company. The
concept of lifting the corporate veil has been regarded by the courts and jurists. The Courts
according to Gowers common dictum would lift the veil when the corporate personality of
the company is being blatantly being used as a means to commit fraud, improper conduct or
where the protection of public interest is of paramount importance or where the sole purpose
of forming the company was to evade taxes. The corporation shall be regarded as an
association of persons rather than a legal entity when the very same legal entity is used to
defeat public convenience, justify wrong or to defend crime.
To have clarity in the concept of lifting of corporate veil, corporate personality of a
company is required to be understood. The courts before did not affix any liability of the
corporate on the ground that being an artificial personality, they are completely incapable of
having any mens rea but later the courts took an altogether different approach wherein
through judicial pronouncements they held that the corporate can be criminally prosecuted.

Grounds of lifting the corporate veil

As early as Solomon, judgments have shown possible inclinations to exceptions to the separate entity
concept.
The circumstances under which the courts may lift the corporate veil may broadly be grouped under
the following two heads:
A. Under statutory provision:
when membership is reduced (under section 45 of the companies act improper use of name
(section 147(4))
Fraudulent conduct (section 542)
Failure to refund application money (section 69(5))
Misrepresentation in prospectus (section 62)
Holding subsidiary companies (section 212)
For facilitating the task of an inspector to investigate the affairs of the company (section 239)
For investigation of ownership
Liability for ultra vires acts
B. Under judicial interpretations
Protection of revenue
Prevention of fraud or improper conduct
Determination of the enemy character of a company
Where a company acts as an agent for its shareholders in case of economic offences

Review of literature:
SINGH AVATAR COMPANY LAW EASTERN BOOK COMPANY CO, ed.16 ,2016 (page
no. 1-34)
The author in his book explains the nature of corporate form and its advantages along with its
disadvantages i.e. the piercing of corporate veil grounds, and also discuss the history of incorporation
in India and England but the author does not talk about any doctrine that need to be followed in India
for the piercing of corporate veil in India neither it analyse the present judicial trends in Indian
judiciary nor any comparative study.

2 vandekerckhok Karen Piercing the corporate veil European company law series ed.2007
(page no.27-93)
The author in his book gives general overview of piercing of corporate veil in legal system were
analysed and discussed the types of piercing and how different jurisdiction deals with the matter of
piercing in their legal system .the author in particular dealt with cases in which piercing of a corporate
veil from a subsidiary to parent corporation and also explains piercing of between or identification of
sister corporation ,his study concern both the term shareholders liability and piercing
The author has analysed Indian, United Kingdom, United States, Netherlands and Germany position
how deal with cases with corporate piercing cases.

Cheng Thomas K. The corporate veil doctrine revised: a comparative study on

corporate doctrines of United States and United Kingdom Boston college international
law review volume 2 issues 2 article 2
The author in his article explains the major differences between the United Kingdom and United
States doctrines and also explains the jurisprudential approaches followed by both the states along
with the doctrines followed by the states. Alter ego doctrine by USA and instrumentality doctrine by
UK and how the treat specific types of cases like fraud and misrepresentation and tax evasion e.t.c.
with the help of briefly discussed case laws. The author also opines that the English position rarely
imposes shareholders liability on other side the U.S position imposes shareholder liability in
maximum number of cases.

GAUTAM DEVANG Corporate Personality and Lifting of the Corporate Veil

2250-1991, 2014
The author provides an understanding of the concept of corporate veil and the author analysed how
different Courts of United Kingdom have interpreted this concept over the period of years. This paper
then looks into various attributes of corporate personality and analyses each one of them. The author
along with explaining the characteristic feature of corporate personality also analyses when and why
Courts can lift corporate veil. An analysis of reasoning of Courts is provided in the paper. This paper
concludes by providing explanation on Statutory provisions under which veil of a corporation can be
pierced.
Statement of problem: The present legal standard regarding the lifting of corporate veil has
given very wide discretion to judges to pierce the veil or not. In addition, it causes uncertainty and
lack of predictability regarding relevant consideration for lifting of corporate veil.

Research question:
What is the meaning of term lifting of corporate veil, and how it affects the principle
of limited liability and separate corporate entity?
What are the grounds of lifting of corporate veil?
What are the differences in the approaches of United States and United Kingdom in
lifting of corporate veil?
What are grounds of lifting of corporate veil under the Indian statues (company law
act 2013)?

Methodology

For this project the research is doctrinal. Various books have been referred both
in the university library and the books available on websites. Also, the study material provided for the
course has been referred to and various articles have been read which are available through internet.

Hypothesis: An inclusive guidelines as to the lifting of corporate veil is much needed, that will
provide a mechanism by which corporation cannot escape its liability.

Research objectives

To analyse various cases on lifting of corporate veil.

To study grounds on which corporate veil is lifted.
To study relevant section of company law act 2013.
To compare the United Nation Indian and United States position for better
understanding.
TENTATIVE CHAPTERIZATION:

Chapter I of this paper will briefly explains the concept of company as a separate
entity.
Chapter II deals with law of piercing the veil in India, United Kingdom and
United States.
Chapter III analyses the common law grounds of lifting the veil of corporate viz.
agency, fraud, avoidance of obligations, prevention of injustice, and imputation
of members' characteristics to the company.
Chapter IV deals with the comparative aspect of the statutory provisions
regarding piercing of veil.
Chapter V reviews some of the more recent cases in which courts have applied
their piercing tests.

Bibliography :
Avatar Singh company law eastern book company, Lucknow 2017
Karen vandekerckhove Piercing of corporate veil by law kluwer
international European company
Boyle and birds company lawed. 3rd 1997
Grier Nicolas U.K. Company law. John Wiley and sons Inc. New York
,USA1998
A. Ramiyaas Guide to company act volume 2 ed.18 lexis nexies
publication
WEB SOURCES
Www.nitishdesai associate .com
www.advocatekhoj.com
www.jstor,com
www.livelaw.com
www.indiankanoon.org
Www.lawteacher.com