coporate veil
This query is : Resolved
12 September 2009
i m unable to understand of concept of lifting of corporate veil plz give me some examples on that concept ?
Soumitra Chawathe
(Expert)
22 September 2009
Dipak,
A company is an artifical judicial person so it has got a distinct legal personality. This is a statutory previlege and must be used for legitimate business purposes only. If fraudulent and dishonest use of this artificial personality is made, then the law would break or pierce the corporate veil to find out the real motive of the fraud.
A corporate veil is a shield which the directors of a company can use for hiding their criminal / unethical activities.
E.g. In case of high profits, the company may spend / divert the money on unethical / unnecessary activities or say incorporation of a new group company or any other matter just to deny bonus to its workers or payment of dividend to its members.
A company is an artifical judicial person so it has got a distinct legal personality. This is a statutory previlege and must be used for legitimate business purposes only. If fraudulent and dishonest use of this artificial personality is made, then the law would break or pierce the corporate veil to find out the real motive of the fraud.
A corporate veil is a shield which the directors of a company can use for hiding their criminal / unethical activities.
E.g. In case of high profits, the company may spend / divert the money on unethical / unnecessary activities or say incorporation of a new group company or any other matter just to deny bonus to its workers or payment of dividend to its members.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Visiting card purchase
- GST on reimbursement of expenses
- Query on effect of registration of property
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Wrong CMPo8 file
- Number of years as per AS amortisation of Goodwill
- Whether output tax is taken credit by purchaser
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Equity Share Sale and Purchase
- Additional trade name
- Foriegn assets disclosure
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
