Corporate veil
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The document discusses the concept of corporate veil, which separates a company from its members as a separate legal entity. While a company cannot act on its own and needs members to function, the corporate veil can be lifted in certain circumstances defined by statute or courts. These include misrepresentation to investors, fraudulent conduct, tax evasion, and when considering a company's public interest, sham status, or avoiding legal obligations. The corporate veil protects members from a company's liabilities but is pierced in cases of wrongdoing.
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Corporate veil
- 2. Company is a artificial Person Having saparate legal entity Saparate from its members Can sue if someone is wrongful Can be sued if it is doing wrongful acts Hence there is a veil in between company and the members
- 3. Company cannot act on its own Company is unable to undersatand What is Right or Wrong of course there is some human agncy (Members of the co.) functioning on the behalf of the company. Hence for the wrongful act of the company its members are picked and punished in other words CORPORATE VEIL IS LIFTED
- 4. Circumstances when the corporate veil is lifted is covered under two heads Statutory Provisions Judicial Provisions
- 5. Misstatement in the prospectus Failure to return the application money Misdescription of company’s name For investigation regarding the ownership of the company Fraudulent conduct Inducing persons to invest money in the company Furnishing false ststement
- 6. Tax Evasion Prevention of Fraud Determination of enemy character Ultra vires act Agency Companies Public interest Sham Companies Companies avoiding the legal obligations
- 7. Thankyou