Lifting of Corporate Veil (Solomon v. Solomon)
A company once incorporated becomes separate legal entity. Though a company comprises its Shareholders, Board of Directors and the management and employees, it is distinct from them and has a status of separate entity due to its incorporation. Thus the Veil of incorporation demarcates and differentiates the company from its members, management and employees.
The basic principle of corporate law is incorporation or registration of companies under Companies Act that confers on a company the status of separate legal person who is liable for its own actions and the properties of the company belongs to it and not to its directors, management or shareholders. On incorporation the Company is also bestowed with Perpetual Succession, Capacity to Sue and be sued, Transferability of its Shares, and Limited Liability.
Lifting of the Corporate veil is not permitted except in certain specific circumstances.