DOCTRINE OF LIFTING CORPORATE VEIL
The concept of a company, being a corporate entity and one of the most advantageous forms of business organization, is based on various concepts- the existence of a 'separate legal entity' being the most important one. By this phrase, we convey that the company is an artificial person, different from its members, i.e., it has its own individuality and, hence, for the acts done by this person, others cannot be held liable. The problem of the lifting of the corporate veil has been considered by the courts and has been laid down for many years and there are examples in cases where the courts have denied strict application of the doctrine of lifting up of corporate veil. The doctrine of lifting up of corporate veil has been established to maintain efficiency in business As Lord Macnaghten observed in a landmark judgment of Solomon v. Solomon:

that the company is at law a different person altogether from the subscribers to the memorandum, and, though it may be that after incorporation the business is there has been no difference from before, and the same people are directors, and the same persons receive the profits, the company is not in law the agent of the subscribers or trustee for them. Broadly, and mainly speaking the corporate veil may be lifted where the statute itself considers lifting the veil or a beneficent statute is sought to be evaded or where associated companies are inseparable as to be, in reality, part of one concern. Another very important legal matter related to fixing criminal liability on corporations is whether a parent company or its subsidiary would eventually be held liable for the unjust acts of the subsidiary. In India, the Bhopal Gas case is one of the most appropriate examples where the question arose as to whether a parent company or the subsidiary is liable for the environmental hazard. The two legal issues involved in the Bhopal case were- whether there is a direct duty of a parent corporation to manage its subsidiaries in a competent manner and, secondly, whether the parent corporation can vicariously be held liable for the acts of its subsidiaries. The answer to the legal questions been discussed here lies in the fact that the persons injured by criminal acts of a multinationals corporation are not in a position to isolate which sector of the company caused the harm, yet it is visible that the multinational enterprise that caused the harm is liable for such harm.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.