Veil of incorporation
The veil of incorporation is a legal principle that separates a company's legal identity from its owners and directors, establishing limited liability for shareholders and enabling the corporation to act as an independent legal entity.
Tumisang Bogwasi
Tumisang Bogwasi
What is Veil of incorporation?
The veil of incorporation is a legal concept that separates a company’s legal identity from its owners and directors. This separation is a fundamental principle of corporate law, establishing limited liability for shareholders.
In essence, it creates a distinct legal entity, allowing the corporation to enter into contracts, own assets, and incur debts independently of the individuals who manage and own it. This separation is crucial for fostering investment and entrepreneurship by limiting the personal financial risk associated with business ventures.
However, this protective shield is not absolute. Courts can, under specific circumstances,
