A historical saga of Separate Legal Person under Company Law
National Law Institute University, Bhopal, India.
Volume III, Issue V, 2020
The doctrine of the veil of incorporation is a legal notion that alienates the personality of a company or a corporation from the personalities of its shareholders, subscribers, and directors. The corporate veil protects all the abovementioned ilk from being personally liable for the company’s debts, obligations, and other encumbrances. The Indian courts, in their plethora of rulings, held that the company is a separate legal entity. But, this concept of piercing the corporate veil has been widened with the passage of time which allowed the courts to exercise their discretion to the extent of sporadic scope. This research project analyzed and assessed the aftermaths of widening discretion of the courts to pierce the veil or not. To my utmost surprise, I discovered that the broad discretion of the courts to pierce the veil resulted into uncertainty and ambiguity in situations when the court was buffeted by the responsibility of bringing out the corporate predictability and clarity.
Keywords: Corporate veil, separate legal personality, board of directors, limited liability.