Commencing with the Salomon case, the rule of SLP has been followed as an uncompromising precedent 5 in several subsequent cases like Macaura v Northern Assurance Co. 6, Lee v Lee’s Air Farming Limited, 7 and the Farrar case. 8 Farrar (n 8). See also, John Lowry & Arad Reisberg, Pettet’s Company Law: Company Law and Corporate Finance (4th edn, Pearson 2012).

Baltrušaitis, Jurgis (1967). La Quête d'Isis: Essai sur la légende d'un mythe (in French). Olivier Perrin. A company set up to carry out a series of fictitious transactions to try and protect the government of the Republic of CongoIt refers to the situation where a shareholder is held liable for its corporation’s debts despite the rule of limited liability and/of separate personality. The veil doctrine is invoked when shareholders blur the distinction between the corporation and the shareholders. A company or corporation can only act through human agents that compose it. As a result, there are two main ways through which a company becomes liable in company or corporate law: firstly through direct liability (for direct infringement) and secondly through secondary liability (for acts of its human agents acting in the course of their employment). COMPANY AVOIDING LEGAL OBLIGATIONS- Where the use of an incorporated company is being made to avoid legal obligations, the Court may disregard the legal personality of the company and proceed on the assumption as if no company existed.

United States v. Milwaukee Refrigerator Transit Company [xii]–In this case, the U.S. Supreme Court held that “where the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud or defend crime, the law will disregard the corporate entity and treat it as an association of persons.” Thus when “Tata Company” or “German Company” or “Government Company” is referred to, we look behind the smoke-screen of the company and find the individual who can be identified with the company. This phenomenon which is applied by the courts and which is also provided now in many statutes is called “ lifting of the corporate veil”. As a consequence of the lifting of the corporate veil, the company as a separate legal entity is disregarded and the people behind the act are identified irrespective of the personality of the company. So, this principle is also called “disregarding the corporate entity”. LIFTING THE CORPORATE VEIL Meaning of the doctrine: Tort victims and employees, who did not contract with a company or have very unequal bargaining power, have been held to be exempted from the rules of limited liability in Chandler v Cape plc. In this case, the claimant was an employee of Cape plc's wholly owned subsidiary, which had gone insolvent. He successfully brought a claim in tort against Cape plc for causing him an asbestos disease, asbestosis. Arden LJ in the Court of Appeal held that if the parent had interfered in the operations of the subsidiary in any way, such as over trading issues, then it would be attached with responsibility for health and safety issues. [19] Arden LJ emphasised that piercing the corporate veil was not necessary. There would be direct liability in tort for the parent company if it had interfered in the subsidiary's affairs. The High Court before it had held that liability would exist if the parent exercised control, all applying ordinary principles of tort law about liability of a third party for the actions of a tortfeasor. The restrictions on lifting the veil, found in contractual cases made no difference. This jursidction has been settled to play an important role in the human rights cases [20] and. [21] "Single economic unit" theory [ edit ] Tata Engineering and Locomotive Co. Ltd. State of Bihar [xvii]– In this case, it was stated that a company is also not allowed to lay claim on fundamental rights on the basis of its being an aggregation of citizens. Once a company is formed, its business is the business of an incorporated body thus formed and not of the citizens and the rights of such body must be judged on that footing and cannot be judged on the assumption that they are the rights attributable to the business of the individual citizens.

Statutory Provisions For Lifting The Veil-

Kinney Shoe Corp. v. Polan, 939 F. 2d 209 (4th Cir. 1991)". Google Scholar . Retrieved 9 September 2017.

Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may "pierce" or "lift" the corporate veil. Greer, John Michael (1997). Circles of Power: Ritual Magic in the Western Tradition. Llewelyn Worldwide. ISBN 978-1-56718-313-9. After Adams v. Cape Industries it seemed that there will need to be an express agency agreement for such a relationship to be found. The Hivemind Invasion of Civilization" is a compendium of esoteric mystery sciences, an invaluable, timeless resource, building a progressive tapestry of revelation upon revelation, LOADED with truly mind-blowing graphics, visuals, & stunning images, deep Universal Secrets, advanced occult symbolism, rich philosophical & existential motifs utilized in Hollywood & pop culture, language, mythology, spiritual mysticism & fundamental laws of nature, astrotheology & the constructs of masonic civilization for individual & collective mastery, as well as control, coercion, confinement & enslavement, but leading us ultimately to sovereignty & liberation from the artifices of the manipulation of reality itself & most importantly, our perception of it!

The Exception of Veil Piercing

The case concerned claims of certain unsecured creditors in the liquidation process of Salomon Ltd., a company in which Salomon was the majority shareholder, and accordingly, was sought to be made personally liable for the company’s debt. Hence, the issue was whether, regardless of the separate legal identity of a company, a shareholder/controller could be held liable for its debt, over and above the capital contribution, so as to expose such member to unlimited personal liability. RULING IN SALOMON V SALOMON HOLDING AND SUBSIDIARY COMPANIES- In the eyes of law, the holding company and its subsidiaries are separate legal entities.

The Court of Appeal, declaring the company to be a myth, reasoned that Salomon had incorporated the company contrary to the true intent of the then Companies Act, 1862, and that the latter had conducted the business as an agent of Salomon, who should, therefore, be responsible for the debt incurred in the course of such agency. Several other sources influenced the motif of the veiled Isis. One was a tradition that linked Isis with nature and the goddess Artemis. European art has a long tradition of personifying nature as a motherly figure. Starting in the 16th century, this motif was influenced by the iconography of the goddess Artemis of Ephesus (also known under the name of her Roman equivalent, Diana). The Ephesian Artemis was depicted with round protuberances on her chest that may originally have been jewelry but came to be interpreted as breasts. Isis was sometimes compared with Artemis, and the Roman writer Macrobius, in the fourth century CE, wrote, "Isis is the earth or nature that is under the sun. That is why the goddess's entire body bristles with a multitude of breasts placed close to one another [as in the case of Artemis of Ephesus], because all things are nourished by earth or by nature." Thus, the 16th-century artists represented nature as Isis-Artemis with multiple breasts. [5] In The King v Portus; ex parte Federated Clerks Union of Australia [iv], where Latham CJ while deciding whether or not employees of a company owned by the Federal Government were not employed by the Federal Government ruled that the company is a distinct person from its shareholders. The shareholders are not liable to creditors for the debts of the company. The shareholders do not own the property of the company. One of the main motives for forming a corporation or company is the limited liability that it offers to its shareholders. By this doctrine, a shareholder can only lose what he or she has contributed as shares to the corporate entity and nothing more. This concept is in serious conflict with the doctrine of lifting the veil as both these do not co-exist which is discussed by us in the paper in detail. DEVELOPMENT OF THE CONCEPT OF “LIFTING THE CORPORATE VEIL”

Conclusion

It is neither necessary nor desirable to enumerate the classes of cases where lifting the veil is permissible, since that must necessarily depend on the relevant statutory or other provisions, the object sought to be achieved, the impugned conduct, the involvement of the element of public interest, the effect on parties who may be affected, etc.”. This was iterated by the Supreme Court in Life Insurance Corporation of India v. Escorts Ltd. [vi] Macpherson, Jay (2004). "The Travels of Sethos". Lumen: Selected Proceedings from the Canadian Society for 18th-Century Studies. 23. There are two existing theories for the lifting of the corporate veil. The first is the “alter-ego” or other self theory, and the other is the “instrumentality” theory. The "single economic unit" theory was likewise rejected by the CA in Adams v Cape Industries, [26] where Slade LJ held that cases where the rule in Salomon had been circumvented were merely instances where they didn't know what to do. The view expressed at first instance by HHJ Southwell QC in Creasey v Breachwood [27] that English law "definitely" recognised the principle that the corporate veil could be lifted was described as a heresy by Hobhouse LJ in Ord v Bellhaven, [28] and these doubts were shared by Moritt V-C in Trustor v Smallbone (No 2): [29] the corporate veil cannot be lifted merely because justice requires it. Despite the rejection of the "justice of the case" test, it is observed from judicial reasoning in veil piercing cases that the courts employ "equitable discretion" guided by general principles such as mala fides to test whether the corporate structure has been used as a mere device. [30] Perfect obligation [ edit ]