The Concept of Corporate Veil: A Comparative Study of India, UK and USA

Abstract

A legal notion known as the "corporate veil" divides a company's obligations and liabilities from the private obligations and actions of its officials, directors, and shareholders. Stated differently, the corporate veil acts as a barrier between individual stakeholders and the corporation, protecting the latter as a distinct legal entity. A corporation that is set up this way is recognized legally as distinct from its owners. This isolation is one of the primary advantages of establishing a corporation. The corporate form shields individual shareholders from personal liability for the obligations and liabilities of the company. In the event that the company faces financial difficulties or legal issues, the personal assets of the owners are usually protected, and their liability is limited to the amount they invested in the business. It's critical to keep in mind that the idea of the corporate veil has some restrictions. Courts have the power to "pierce the corporate veil" in some circumstances, especially when there is evidence of wrongdoing, fraud, or illegal use of the corporate structure.