What is Corporate Veil and When Can it be Lifted?

The corporate veil is a legal concept that treats a company as a separate legal entity, distinct from its shareholders and directors. This separation protects individuals from being personally liable for the company’s debts and obligations.

However, courts may “lift” or “pierce” the corporate veil to look beyond the company’s separate identity in certain situations.

This usually happens when the company is used for fraud, tax evasion, evasion of legal obligations, or to defeat public interest.

In India, courts have lifted the corporate veil in cases involving sham companies, misuse of corporate form, or when justice, equity, and good conscience demand it.