Beyond Separate Legal Personality: A Critical Comparative Study Of The Doctrine Of Piercing The Corporate Veil In India
- IJLLR Journal
- 18 hours ago
- 1 min read
Nishalya Singh, Jindal Global Law School, O.P. Jindal Global University
ABSTRACT
The Research Paper undertakes a comparative analysis of the doctrine of piercing the corporate veil, examining how courts across different jurisdictions depart from the foundational principle of separate legal personality established in Salomon v. Salomon & Co. Ltd. While this doctrine ordinarily shields directors and shareholders from being personally liable for the acts of a company, courts have recognized exceptions where the corporate form is used to perpetuate fraud, evade taxes and circumvent statutory obligations or conceal the true relationship between companies which are affiliated. Drawing on Judicial precedent from various jurisdictions such as the United Kingdom, Germany, China and India, the paper argues that although certain grounds for invoking this doctrine are broadly shared across jurisdictions, their application differs significantly in practice. In the absence of codified statutory guidance, Indian courts rely heavily on judicial precedent and have extended the doctrine to encompass public interest. The English Courts apply a stricter test requiring evidence of both control and impropriety before the invocation of the doctrine. German Law addresses shareholder liability primarily through codified statutory provisions rather than judicial discretion while the Chinese Courts have adapted an increasingly expansive approach to shareholder liability, particularly in cases of Undercapitalization. The paper concludes that the doctrine of piercing the corporate veil remains an exercise in Judicial pragmatism, shaped as much by each jurisdiction’s institutional and statutory context as by any single unifying legal principle.
