A Corporate Veil is a legal concept that separates the personality of a corporation from the personalities of its shareholders, and protects them from being personally liable for the company's debts and other obligations. This protection is not ironclad or impenetrable. Where a court determines that a company's business was not conducted in accordance with the provisions of corporate legislation it may hold the shareholders personally liable for the company's obligations under the legal concept of lifting the corporate veil.
3 Situations That Require Lifting the Corporate veil.
1. To determine the true character of the company•
2. Determination of residence for tax purposes•
3. Evasion of statutory provisions