Corporate Law Challenges In E-Commerce And Online Marketplace
- IJLLR Journal
- Oct 5
- 2 min read
Agnika Elango Rana, B.Com., LL.B. (Hons.), Presidency University, Bengaluru
ABSTRACT
This paper analyses the doctrine of piercing and lifting the corporate veil within Indian jurisprudence, a fundamental exception to the Salomon rule of separate legal personality. The study finds that the corporate veil is increasingly treated not as an absolute right, but as a qualified privilege conditional upon lawful conduct.
The analysis is structured to demonstrate that exceptions have evolved through a dual mechanism. Firstly, Judicial Discretion has developed equitable grounds to prevent the corporate form from being used as a sham or façade to evade pre-existing legal or contractual obligations (e.g., in cases of tax evasion or fraud). Secondly, Statutory Mandate explicitly bypasses the veil in modern legislation. This paper examines specific grounds under the Companies Act, 2013 (such as fraudulent trading under Section 339) and extends to sectoral laws.
The research highlights the critical impact of digital commerce, where the challenges posed by e-commerce platforms necessitate new legal responses. This is evident in the regulatory focus on the Single Economic Entity doctrine under the Competition Act, 2002, and the imposition of severe financial penalties under the DPDP Act, 2023. The conclusion asserts that these legal developments collectively mandate a shift toward Digital Compliance Governance at the board level. The corporate veil remains intact only where its preservation serves the interest of justice and upholds a comprehensive duty of corporate and sectoral compliance. A key suggestion is that stakeholders, including regulatory agencies and commercial entities, should meticulously scrutinize the advantages and restrictions—along with associated difficulties—involved in digitizing the foundational aspects of company law and corporate listing and governance requirements."
Keywords: Corporate veil, Companies Act 2013, Competition Act 2002, DPDP Act 2023, Consumer Protection Act 2019
