Corporate veil

The corporate veil

From the jurstic point of view, a company is a legal personal distinct from its members. This principle may be refered to as “the veil of incorporation”. The courts in genral consider themselves bound by this principle.

Exceptions:

1.protection of revenue.

2.prevention of froud or inproper conduct.

3.determination of cherecter of a company whether it is enemy.

4.where the company is a sham.

5.company avoiding legal obligation.

6.company acting as agent or trustee of the shareholders.

7.avoidence of welfare legislation.

8.protecting public policy.

Statutory exeptions:

If a company carries on business for more than 6 months after the number has been reduced below 7 in case of a public company or 2 in case of a private company.

1.number of members below statutory minimum.

2.failure to refund application money.

3.misdespertion of company name.

4.fradulment of trading.

5.holding and subsidery company.