Lifting The Veil Of Incorporation

Consequently a company s liabilities are its own not those of its shareholders.

Lifting the veil of incorporation. There is great reluctance by the. In those cases there was an issue of transferring contractual obligations the same way. Abuse of the separate legal personality separate legal personality. This doctrine emphasizes that a company has a separate entity from its.

The advantages of incorporation of a company like perpetual succession transferable shares capacity to sue flexibility. In adeyemi v lan and baker nig ltd the court held that there is nothing sacrosanct about the veil of incorporation. In turn a protective veil of sorts is cast over the true controllers of the company. Doctrine of lifting the veil received further development in the case antonio gramsci v stepanovs 2011 nyombi 2014.

The locus classicus case of salomon v. Meaning of lifting of corporate veil. Reasons for lifting the veil of incorporation circumstances when the veil is lifted are haphazard and difficult to categorize. The incorporation of a company creates a separate person in law.

Lifting the veil occurs where the courts or law disregard the corporate personality of the company in deserving circumstances. The veil shall be lifted to prevent the avoidance of recognition by the eyes of equity. This article at first introduces to the readers the concept of veil of incorporation then it explains the meaning of the term lifting of the corporate veil it then points out the judicial as well as the statutory provisions for lifting of the corporate veil with the help of various case laws. Lifting the veil of incorporation.

Critically evaluate with reference to relevant case law and statute how far this statement accurately reflects the current law relating to lifting the veil of incorporation. A company once duly incorporated becomes an artificial person that has a separate legal entity distinct from the people who constitute the company. Introduction salomon v salomon 1 involved the principle of separate corporate personality. The principle of lifting the veil of incorporation is often used for transition tort liability from the company to its owner.