Question

If company do not follow the principle of separate legal entity can be done______________.

• A. Lifting of corporate veil
• B. Principle of equity
• C. Principle of natural justice
• D. All of above

Answer 1

Answer: (A)

Lifting of corporate veil

Corporate veil refers to a situation in which courts put aside limited liability and hold a corporation's shareholders or directors personally liable for the corporation's actions or debts. Veil piercing is most common in close corporations.

lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders.