Meaning of the phrase ‘Lifting of the Corporate Veil’

October 23rd, 201012:12 am @    

The term corporate veil is associated with an incorporated business body i.e. a Company. A corporate body has a distinct identity from its members but it is simply legal fiction. In reality Individual/persons are the ones who run a company in hopes of acquiring benefits out of it. The word veil in its verb form means- to hide something or make it obscure in order to conceal. It might happen that some individuals indulge in fraudulent or unlawful practices in the garb of running a corporate body. To investigate the reality behind the window dressing, the courts might have to pull up the ‘veil’ and discover the true culprit. This is known has ‘lifting the Corporate Veil.

Courts usually do not interfere in the affairs of those running the company. This has been made very clear in the case of Salomon v. Salomon where the court strictly adhered to the principal of separate legal entity and avoided lifting the veil.

Picture credit: Chicago litigation lawyer blog

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Nikita is the Co-Founder and Managing Editor of She is a lawyer/author residing in Delhi. She believes that increasing legal awareness is the key to ensure social justice and simplification of law is the means to achieve it. She writes articles on social and political issues for various platforms in English and Hindi.

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