SYNOPYSIS FOR DISSERTATION:

TITLE OF TOPIC LIFTING OF

CORPORATE VEIL: A COMPARATIVE
ANALYSIS OF INDIA, U.S.AND U.K.
Abstract
A corporation is clothed with a legal personality. The personality of
corporation is different from that of its members. It is an exclusive creation
of law having no existence apart from its individual members who form the
corporate group and whose acts by fiction are attributed to the corporate
entity. As a result of this change in the membership does not affect the
existence of corporation or its unity. If it is assumed that the will of the
corporation is attributed to it by fiction of law then it leads one to infer that
it is always lawful as will attributed by law can never be unlawful or illegal.
Therefore it follows that the corporation can never be indulged into acts
which are ultra vires .
 INTRODUCTION
The most fundamental Principle of a company law is its corporate personality.
It is on this quintessential and elemental principle that which makes a
company an entity which is entirely distinct from its shareholders, promoters,
directors etc. Thus, when a company is incorporated, a legal entity gets
created, which is separate from its members, employees, shareholders,
directors, promoters etc., which has led to the concept of corporate veil. The
purpose of establishing this doctrine was to provide business efficacy and
convenience. The main stimulation behind the formation of a corporation or
a company is the limited liability which is offered to its shareholders and
because of this limited liability, the liability of each shareholder is limited
only what he or she has contributed as shares to the company. In the
doctrine of Lifting the Corporate Veil, the law goes behind the mask or veil
of incorporation to determine the real person or group of people behind the
company. The concept of lifting the corporate veil has been regarded by the
courts and jurists. The Courts according to Gowers common dictum would
lift the veil when the corporate personality of the company is being blatantly
being used as a means to commit fraud, improper conduct or where the
protection of public interest is of paramount importance or where the sole
purpose of forming the company was to evade taxes
 The corporation shall be regarded as an association of
persons rather than a legal entity when the very same
legal entity is used to defeat public convenience, justify
wrong or to defend crime.
To have clarity in the concept of lifting of corporate
veil, corporate personality of a company is required to
be understood. The courts before did not affix any
liability of the corporate on the ground that being an
artificial personality, they are completely incapable of
having any mens rea but later the courts took an
altogether different approach wherein through judicial
pronouncements they held that the corporate can be
criminally prosecuted.
 Grounds of lifting the corporate veil
As early as Solomon, judgments have shown possible inclinations to exceptions to the
separate entity concept.
The circumstances under which the courts may lift the corporate veil may broadly be
grouped under the following two heads:
A. Under statutory provision:
when membership is reduced (under section 45 of the companies act improper use of name
(section 147(4))
Fraudulent conduct (section 542)
Failure to refund application money (section 69(5))
Misrepresentation in prospectus (section 62)
Holding subsidiary companies (section 212)
For facilitating the task of an inspector to investigate the affairs of the company (section 239)
For investigation of ownership
Liability for ultra vires acts
B. Under judicial interpretations
Protection of revenue
Prevention of fraud or improper conduct
Determination of the enemy character of a company
Where a company acts as an agent for its shareholders in case of economic offences
 Review of literature:
Review of literature:
SINGH AVATAR ON COMPANY LAW EASTERN BOOK COMPANY CO, ed.16 ,2016
(page no. 1-34)
The author in his book explains the nature of corporate form and its advantages
along with its disadvantages i.e. the piercing of corporate veil grounds, and also
discuss the history of incorporation in India and England but the author does not
talk about any doctrine that need to be followed in India for the piercing of
corporate veil in India neither it analyse the present judicial trends in Indian
judiciary nor any comparative study.

2 vandekerckhok Karen Piercing the corporate veil European company law

series ed.2007 (page no.27-93)
The author in his book gives general overview of piercing of corporate veil in legal
system were analysed and discussed the types of piercing and how different
jurisdiction deals with the matter of piercing in their legal system .the author in
particular dealt with cases in which piercing of a corporate veil from a subsidiary to
parent corporation and also explains piercing of between or identification of sister
corporation ,his study concern both the term shareholders liability and
piercing
The author has analysed Indian, United Kingdom, United States, Netherlands and
Germany position how deal with cases with corporate piercing cases.
 Cheng Thomas K. The corporate veil doctrine revised: a comparative study on
corporate doctrines of United States and United Kingdom Boston college
international law review volume 2 issues 2 article 2
The author in his article explains the major differences between the United Kingdom
and United States doctrines and also explains the jurisprudential approaches
followed by both the states along with the doctrines followed by the states. Alter ego
doctrine by USA and instrumentality doctrine by UK and how the treat specific types
of cases like fraud and misrepresentation and tax evasion e.t.c. with the help of
briefly discussed case laws. The author also opines that the English position rarely
imposes shareholders liability on other side the U.S position imposes shareholder
liability in maximum number of cases.

DEVANG GAUTAM Corporate Personality and Lifting of the Corporate Veil

2250-1991, 2014
The author provides an understanding of the concept of corporate veil and the
author analysed how different Courts of United Kingdom have interpreted this
concept over the period of years. This paper then looks into various attributes of
corporate personality and analyses each one of them. The author along with
explaining the characteristic feature of corporate personality also analyses when and
why Courts can lift corporate veil. An analysis of reasoning of Courts is provided in
the paper. This paper concludes by providing explanation on Statutory provisions under
which veil of a corporation can be pierced.
 Statement of problem:
The present legal standard regarding the
lifting of corporate veil has given very wide
discretion to judges to pierce the veil. In
addition, it causes uncertainty and lack of
predictability regarding relevant consideration
for lifting of corporate veil.
 Research question:
What is the meaning of term lifting of corporate veil, and how it
affects the principle of limited liability and separate corporate
entity?
What are the grounds of lifting of corporate veil?
What are the differences in the approaches of United States and
United Kingdom in lifting of corporate veil?
What are grounds of lifting of corporate veil under the Indian
statues (company law act 2013)?

Methodology
For this project the research is doctrinal. Various
books have been referred both in the university library and the
books available on websites. Also, the study material provided
for the course has been referred to and various articles have
been read which are available through internet.
 Hypothesis:
An inclusive guidelines as to the lifting of
corporate veil is much needed, that will
provide a mechanism by which corporation
cannot escape its liability.
 Research objectives

To analyse various cases on lifting of corporate

veil.
To study grounds on which corporate veil is
lifted.
To study relevant section of company law act
2013.
To compare the United Nation Indian and
United States position for better
understanding.
 TENTATIVE CHAPTERIZATION

Chapter I will briefly explains the concept of company as a

separate entity.
CHAPTER II deals with law of piercing the veil in India, United
Kingdom and United States.
Chapter III analyses the common law grounds of lifting the
veil of corporate viz. agency, fraud, avoidance of obligations,
prevention of injustice, and imputation of members'
characteristics to the company.
Chapter IV deals with the comparative aspect of the statutory
provisions regarding piercing of veil.
Chapter V reviews some of the more recent cases in which
courts have applied their piercing tests.