LIFTING OF CORPORATE VEIL
A Company in law is equal to a natural person and has a separate legal entity of its own. The entity of a Company in entirely separate from that of its shareholders; it bears its own name, its assets are separate and distinct from those of its members; it can sue and be sued exclusively for its own purpose; its creditors cannot obtain satisfaction from the assets of its members; the liability of the members or shareholders is limited to the capital invested by them; similarly, the creditors of the members have no right to the assets of the corporation. This position has been well-established in the case of Salomon v. Salomon & Co. (1897) A.C. 22, H.L. which was pronounced in 1897 by the House of Lords. But the concept of Corporate Veil was established to encourage and promote trade and commerce, not to defraud people, evade obligations of law or to commit illegalities which are otherwise not permissible in law. Therefore, where a Company is established with the purpose of de...