Write briefly about the term doctrine of piercing the veil.
-Liberty is freedom of action, and actions can only be performed by human beings, not by abstractions like companies. When it becomes necessary t control freedom of action, the courts ‘pierce’ or lift the veil of corporate personality in order to take account of the conduct of individuals, whose actions are in question. Courts, therefore, do not always adhere to the separateness of corporate existence, which excludes any consistent theory and emphasizes the need at what courts do in particular situations. By lifting the veil of corporate personality, the conduct of certain individuals is looked at with a view to imputing it to the corporation.
The veil is lifted as follows:-
(1) Whenever the courts find it necessary to take account of behaviour, they have to look at the flesh and blood actors behind the corporate façade Gilford Motor Co. v. Home.
(2) The acts of members are imputed to the company, even when they act outside its Constitution Parker and Cooper Ltd v. Reading.
(3) In tort it is usual to distinguish between intra vires and ultra vires torts. Strictly speaking, the commission of torts is never within the powers of a corporation; what is referred to by intra vires torts is torts committed in the course of doing something which is within the powers of the corporation. The actions of members of the ‘supreme directorate’ may sometimes be regarded as the ‘personal’ acts of the corporation.