The Corporate Veil In India: Law And Practice
- IJLLR Journal
- Oct 9
- 1 min read
Hari Prakash. V, Kalai Selvan P & Hiran Y, KMC College of Law
1. ABSTRACT
The doctrine of the corporate veil stands at the intersection of economic efficiency and legal accountability. This research critically examines the evolution, application, and challenges of the doctrine in India, with comparative insights from the United Kingdom and the United States. While the principle of separate legal personality, established in Salomon v. A. Salomon & Co. Ltd., underpins modern corporate law by granting limited liability and encouraging investment, its misuse for fraud, tax evasion, or social harm necessitates judicial intervention. In India, courts and statutes have adopted a broader and more pragmatic approach to lifting the veil than their UK counterparts, allowing intervention not only for fraud and tax evasion but also to protect public interest and welfare. However, this flexibility has led to inconsistency due to the absence of a uniform legal test. The research argues for a codified and structured framework, drawing lessons from comparative jurisdictions, to strike a balance between protecting corporate personality and preventing its abuse. This study highlights that a well-defined statutory approach, supported by judicial discretion, can foster both investor confidence and social justice in India’s corporate landscape.
