Analyzing The Doctrine Of Separate Legal Entity And Lifting Of The Corporate Veil
- IJLLR Journal
- Jul 11, 2022
- 1 min read
Keshav Krishnan & Shubhra Sharma, Jindal Global Law School
Introduction
The term ‘company’ is mentioned in Section 2(20) of the Companies Act, 2013. It says, ‘company’ means a company incorporated under this Act or under any previous company law”1. This means that a company to be declared as incorporated has to get it registered under the Companies Act, 2013, and if it’s not, it’ll be declared illegal. However, this section does not exactly define the meaning of the term ‘company’, nor does it talk about concepts like separate legal entity and lifting of the corporate veil.
Research Question
Is lifting of corporate veil justified as it violates Article 21 of the Constitution of India?
Separate Legal Entity
After incorporation of a company under Companies Act, it becomes a legal entity i.e., having its own separate corporate personality under the law. However, in the case of The State Trading Corporation of India Ltd. & Others v. The Commercial Tax Officer, Visakhapatnam and Others2, the Supreme Court said that “though a company is a legal person/juristic person or a person in the eye of the law, it is not a citizen of India. So, it cannot enjoy the fundamental rights guaranteed by the Constitution of India and the provisions of Citizenship Act”.
Comments