flowchart LR
A["Company <br> (statutory creation)"] --> B[Incorporated Association]
A --> C[Artificial Legal Person]
A --> D[Separate Legal Entity]
A --> E[Limited Liability]
A --> F[Perpetual Succession]
A --> G["Common Seal <br> (now optional)"]
A --> H[Transferability of Shares]
A --> I["Separation of <br> Ownership and Management"]
A --> J[Capacity to Sue and Be Sued]
A --> K[Regulatory Compliance]
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class A,B,C,D,E,F,G,H,I,J,K dark;
1 Concept, Definition and Features of Company
ImportantLearning Objectives
By the end of this chapter, the reader will be able to:
- Explain the historical and etymological origins of the term company and locate the concept within the disciplinary tradition of corporate law.
- Distinguish a company from other forms of business organisation by reference to its statutory definition under the Companies Act, 2013 and the leading scholarly definitions in jurisprudence.
- Identify and analyse the essential features of a company, including separate legal personality, limited liability, perpetual succession, and the separation of ownership from management.
- Apply the principle of separate legal entity to landmark cases such as Salomon v. Salomon & Co. Ltd. (1897), Lee v. Lee’s Air Farming Ltd. (1961), and Macaura v. Northern Assurance Co. Ltd. (1925), and recognise the circumstances under which the corporate veil may be lifted.
- Evaluate the implications of the company form for stakeholders, including shareholders, creditors, employees, and society at large, drawing on Indian and international examples.
1.1 Introduction
The company stands at the centre of modern commercial life. From the small private limited entity manufacturing components in a tier-three industrial estate to the multinational listed conglomerate operating across continents, the company form has become the dominant vehicle through which capital is raised, risk is organised, and economic activity is conducted. Understanding what a company is, how it is constituted, and what features distinguish it from other forms of business organisation is therefore the foundational task of corporate law.
Corporate law as a discipline has its origins in the chartered trading companies of the seventeenth century, most notably the East India Company of 1600 and the Dutch East India Company of 1602, which pioneered the joint-stock structure that allowed many investors to pool capital while limiting their personal exposure to the venture. The doctrinal foundations of the modern company, however, were laid in the nineteenth century by the English Joint Stock Companies Act, 1844 and the Limited Liability Act, 1855, and crystallised by the House of Lords in Salomon v. Salomon & Co. Ltd. (1897). In India, the present statutory framework is contained in the Companies Act, 2013, which replaced the long-standing Companies Act, 1956 and introduced significant reforms in governance, disclosure, and corporate social responsibility.
This chapter establishes the conceptual foundation for the rest of the book. You will examine the etymology and concept of a company, the leading scholarly and statutory definitions, the essential features that distinguish the company form, and the landmark case law that gives those features their legal force. The discussion is grounded in Indian corporate practice while drawing on the common law tradition that India shares with the United Kingdom, Australia, and other Commonwealth jurisdictions.
1.2 The Concept of a Company
1.2.1 Etymology and Historical Roots
The English word company descends from the Latin roots com (together) and panis (bread), and originally denoted a group of persons who broke bread together, that is, who shared a common meal and, by extension, a common purpose. From this domestic image the term migrated into the language of commerce in late medieval Europe, where it came to describe associations of merchants who pooled goods and capital to undertake voyages or to conduct trade in distant markets. By the seventeenth century the concept had hardened into the chartered joint-stock company, an entity created by sovereign grant to undertake a specific commercial mission with the protection of state-conferred privileges.
In contemporary corporate law, the company has shed its associations with shared meals and royal charters. It is now a creature of statute, brought into existence by registration under a general incorporation statute and endowed by that statute with a distinct legal personality. Yet the etymological residue persists in the central idea of the company as an organised association of persons pursuing a common economic objective.
1.2.2 Statutory Foundation in India
In India, the statutory foundation of the company form is the Companies Act, 2013, which came into force progressively between 2013 and 2014 and now governs the incorporation, regulation, and dissolution of companies in the country. The Act is supplemented by rules issued by the Ministry of Corporate Affairs, by regulations of the Securities and Exchange Board of India (SEBI) for listed entities, and by sectoral regulations for banks, insurers, and other regulated industries.
NoteSection 2(20), Companies Act, 2013: Statutory Definition
Section 2(20) of the Companies Act, 2013 provides:
“Company means a company incorporated under this Act or under any previous company law.”
The definition is deliberately formal. It does not enumerate the substantive features of a company but instead anchors the concept to the act of incorporation under a statute. Everything that follows in corporate law, the rights of shareholders, the duties of directors, the protection of creditors, flows from this single procedural fact: that the entity has been registered, and has thereby acquired legal existence as a person distinct from the persons who own it.
1.2.3 The Company as an Artificial Legal Person
A company is best understood as an artificial legal person. The qualifier “artificial” signals that the personality is conferred by law and does not arise naturally from biological existence. The qualifier “legal” signals that the personality is recognised for legal purposes, that the company can hold rights, owe duties, and bear responsibility in the same manner as a natural person. Because the company has no physical body, it must act through human agents, principally its directors, officers, and authorised representatives, but the legal consequences of those acts attach to the company itself, not to the human beings who carry them out.
TipWhy the Artificial Personality Matters in Practice
The artificial personality of the company is not a legal fiction without practical consequence. It is the device that allows a business to outlive its founders, to raise capital from thousands of unrelated investors, to enter contracts in its own name, to own property that no individual member can claim, and to be sued without exposing the personal assets of those who run it. Every other feature of the company, limited liability, perpetual succession, transferability of shares, follows logically from this single conceptual move.
1.3 Definitions of a Company
The legal literature offers a range of definitions of the company, each emphasising a different facet of the institution. Read together, they build up a composite picture of what the company is and why it occupies the position it does in modern commerce.
NoteLord Justice Lindley: The Association View
Lord Justice Lindley defined a company as:
“An association of many persons who contribute money or money’s worth to a common stock, and employ it in some trade or business, and who share the profit and loss arising therefrom.”
This definition foregrounds the company as a vehicle for pooling capital and sharing economic outcomes. It captures the joint-stock character of the modern company but does not, on its own, distinguish the company from a partnership.
NoteL.H. Haney: The Artificial Person View
The American economist L.H. Haney defined a company as:
“An artificial person created by law, having a separate entity, with perpetual succession and a common seal.”
Haney’s definition captures the four classical attributes that distinguish a company from a partnership: artificial personality, separate entity status, perpetual succession, and the common seal as a mark of corporate authentication.
NoteChief Justice Marshall: The Trustees of Dartmouth College View
In the United States Supreme Court case Trustees of Dartmouth College v. Woodward (1819), Chief Justice John Marshall described a corporation as:
“An artificial being, invisible, intangible and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence.”
Marshall’s formulation is now more than two centuries old, but it remains the most influential single statement of the conceptual nature of the company in the common law world.
The strands in these definitions can be synthesised as follows. A company is a statutorily incorporated association of persons that is recognised in law as an artificial person, with a legal existence separate from its members, whose liability for the company’s debts is normally limited, whose existence does not depend on the continuance of any particular member, and whose ownership interests are represented by transferable shares.
TipA Working Definition for the Chapter
Throughout this book, the term company is used to mean a body corporate registered under the Companies Act, 2013 (or under an earlier Indian companies legislation), having a distinct legal personality, limited liability, perpetual succession, and a capital divided into transferable shares, unless the context indicates otherwise.
1.4 Distinguishing Features of a Company
The features described below are the orthodox attributes of the company form. They are not all equally fundamental, and not every feature is present in every company. A guarantee company has no share capital, a one-person company has only a single member, and a section 8 company is formed for charitable purposes rather than profit. Nevertheless, the features listed here together constitute the conceptual core of the modern company.
1.4.1 Incorporated Association
A company is brought into existence by registration under the Companies Act, 2013. Until registration is complete and the Registrar of Companies has issued a certificate of incorporation, the entity does not exist as a company in law. The act of incorporation is therefore the constitutive moment of the company. It is the point at which a group of persons, by complying with the procedural requirements of the statute, calls into being a new legal person distinct from themselves.
For example, Infosys Limited was incorporated in 1981 under the Companies Act, 1956 by N.R. Narayana Murthy and six co-founders, with an initial capital of ₹10,000. The certificate of incorporation issued by the Registrar of Companies was the legal event that created Infosys as a company; everything that the firm has subsequently achieved, from its 1993 listing on the Bombay Stock Exchange to its present position as a global information technology services firm, presupposes that constitutive act.
1.4.2 Artificial Legal Person
A company is regarded in law as a person, but as an artificial person. It can therefore enter into contracts, acquire and dispose of property, sue and be sued, and bear criminal and civil liability, all in its own name. It cannot, however, perform purely personal acts that depend on biological humanity, such as marriage, voting in a general election, or the taking of an oath.
1.4.3 Separate Legal Entity
The doctrine of separate legal entity holds that a company is, in law, distinct from the persons who own it, manage it, or work for it. Their rights and liabilities are not the company’s, and the company’s rights and liabilities are not theirs. This doctrine is the most important single feature of the company form, and almost every other feature, including limited liability and perpetual succession, depends on it.
NoteSalomon v. Salomon & Co. Ltd. (1897): The Foundational Authority
Aron Salomon was a sole trader who sold his boot manufacturing business to a newly formed company in which he held the overwhelming majority of shares. The company subsequently failed, and the unsecured creditors argued that Salomon, as the controlling shareholder, should be personally liable for the company’s debts. The House of Lords rejected this argument and held that the company, once incorporated, was a separate legal person distinct from Salomon. He could therefore be both a shareholder and a secured creditor of the company without disturbing the validity of the corporate form.
The decision established two propositions that have shaped corporate law ever since: first, that a company is a legal person separate from its members from the moment of incorporation, and second, that the motives of the incorporators are irrelevant to the validity of the company so long as the statutory formalities have been complied with.
NoteLee v. Lee’s Air Farming Ltd. (1961): The Doctrine Extended
Mr. Lee was the controlling shareholder, sole director, and chief pilot of Lee’s Air Farming Ltd., a New Zealand crop-dusting company. He was killed in a flying accident in the course of his employment. His widow claimed compensation under a workers’ compensation statute. The argument against her was that Mr. Lee, as the controlling mind of the company, could not also be its employee. The Privy Council rejected this argument and held that the company was a legal person distinct from Mr. Lee, that it could employ him, and that he was therefore a worker within the meaning of the statute. The widow’s claim succeeded.
The case demonstrates that the separate legal entity doctrine applies even where one person holds substantially all the shares and exercises full control over the company.
NoteMacaura v. Northern Assurance Co. Ltd. (1925): The Doctrine Cuts Both Ways
Macaura sold timber to a company in which he and his nominees held all the shares, but he insured the timber in his own name rather than in the name of the company. When the timber was destroyed by fire, the insurer denied liability on the ground that Macaura had no insurable interest in the property because the timber belonged to the company, not to him. The House of Lords agreed. Although Macaura owned all the shares, he had no proprietary interest in the company’s assets.
The case illustrates the symmetric application of the separate entity doctrine: shareholders are protected from the company’s liabilities, but they are also excluded from the company’s assets.
WarningCommon Misconception: “I Own the Company, So I Own Its Assets”
A frequent misunderstanding among first-time founders and shareholders is that owning shares in a company is equivalent to owning the company’s underlying assets. It is not. A shareholder owns a share, which is a bundle of rights against the company, principally the right to vote, the right to a dividend if one is declared, and the right to a share in the surplus on winding up. The shareholder does not own the company’s factory, its inventory, its bank balance, or its intellectual property. Those assets belong to the company itself, as a separate legal person. Macaura is the authority that students and practitioners most often forget at their cost.
1.4.4 Limited Liability
Limited liability means that the personal liability of a member of a company for the company’s debts is limited to the amount, if any, that remains unpaid on the shares the member has subscribed for, or, in the case of a company limited by guarantee, to the amount the member has agreed to contribute on a winding up. Members do not become personally liable for the company’s debts merely because they own shares in the company.
For example, if a shareholder of XYZ Limited holds 1,000 shares of face value ₹10 each, of which ₹8 per share has been called and paid, the shareholder’s maximum exposure to the company’s creditors is the unpaid ₹2 per share, that is, ₹2,000 in total. If XYZ Limited has accumulated debts of ₹10 crore at the time of liquidation, the shareholder’s personal property remains untouched.
TipWhy Limited Liability is the Engine of Modern Capital Markets
Limited liability is not merely a convenience for investors. It is the device that makes the modern capital market possible. A passive investor with no involvement in management would not invest in a company if the investment exposed the investor’s home, savings, and other assets to the claims of the company’s creditors. By capping the investor’s exposure at the price paid for the share, limited liability allows capital to flow from savers to entrepreneurs at a scale that no other organisational form has matched.
1.4.5 Perpetual Succession
A company has perpetual succession, that is, its existence is not affected by the death, retirement, insolvency, or insanity of any of its members. Members come and go; the company persists. The legal life of the company ends only when it is wound up under the procedures laid down in the Companies Act, 2013 or under the Insolvency and Bankruptcy Code, 2016.
For example, Wipro Limited was founded by M.H. Hasham Premji in 1945 as a vegetable oil manufacturer. The founder’s son Azim Premji took over in 1966 after his father’s sudden death and transformed the firm into a global information technology services company. Despite the change in leadership, the corporate entity Wipro Limited continued without interruption, retaining its assets, contracts, and obligations.
1.4.6 Common Seal
Historically, a common seal, a metal die bearing the name of the company, was used to authenticate documents executed on behalf of the company. The seal functioned as the company’s signature. The Companies (Amendment) Act, 2015 made the use of a common seal optional, recognising that in a digital economy the seal had become a procedural relic. Documents may now be executed by the signatures of two directors, or one director and the company secretary, in place of the seal.
1.4.8 Separation of Ownership and Management
In a public company of any size, ownership and management are typically separated. Shareholders own the company in the sense that they hold its equity capital, but the day-to-day management of the company is delegated to a board of directors, who in turn appoint executive officers to run the business. This separation, first analysed by Berle and Means in their 1932 study The Modern Corporation and Private Property, is the source of the agency problems that occupy a substantial portion of modern corporate governance scholarship.
For example, Tata Consultancy Services Limited (TCS) is owned principally by Tata Sons Private Limited and by public shareholders, but it is managed by a board of directors led by a non-executive chairman, with executive authority delegated to the chief executive officer and the management team. The shareholders elect the directors at the annual general meeting; the directors set the strategy and oversee the executives; the executives run the business. Each layer is accountable to the layer above it, but each operates within its own sphere.
1.4.9 Capacity to Sue and Be Sued
A company can institute legal proceedings in its own name, and it can be sued in its own name. The members are not necessary parties to litigation involving the company, and judgments against the company are enforceable against the company’s assets, not against the personal assets of the members. This is a direct consequence of separate legal personality.
1.4.10 Regulatory Framework and Compliance
Companies in India operate within a dense regulatory framework. The Companies Act, 2013 governs incorporation, share capital, governance, financial reporting, and winding up. The SEBI regulations apply to listed companies and govern disclosure, insider trading, and takeovers. The Income Tax Act, 1961 governs corporate taxation. Sectoral regulators apply to specific industries: the Reserve Bank of India for banks, the Insurance Regulatory and Development Authority of India for insurers, the Telecom Regulatory Authority of India for telecommunications, and so on. Compliance with this framework is not optional, and persistent non-compliance can lead to penalties, prosecution, disqualification of directors, and ultimately to the deregistration of the company.
WarningThe Cost of Compliance is Real but Asymmetric
For a small private company, the cost of compliance with the Companies Act, the Goods and Services Tax legislation, and labour laws can be significant relative to revenue, and is sometimes cited as a barrier to formalisation. For a large listed company, the same costs are trivial relative to revenue, but the reputational consequences of a compliance failure are far greater. Founders should plan for compliance costs from the outset rather than treating them as an afterthought.
1.4.11 Comparative Summary of Features
NoteSummary Table: Distinguishing Features of a Company
| Feature | Brief Description | Illustrative Example |
|---|---|---|
| Incorporated association | Legal existence begins with registration under the Companies Act, 2013 | Infosys Limited incorporated in 1981 |
| Artificial legal person | Recognised in law as a person, distinct from natural personhood | Tata Motors Limited contracts in its own name |
| Separate legal entity | Distinct from its members; owns its own assets and bears its own liabilities | Salomon v. Salomon & Co. Ltd. (1897) |
| Limited liability | Member exposure capped at unpaid share capital or guarantee amount | Shareholder in a listed company loses at most the price paid for shares |
| Perpetual succession | Existence unaffected by death or exit of members | Wipro Limited continued through founder transition in 1966 |
| Common seal | Optional after the 2015 amendment; signatures suffice | Most Indian companies now execute documents by director signatures |
| Transferability of shares | Free in public companies, restricted in private companies | HDFC Bank shares trade on BSE and NSE; Zoho shares are closely held |
| Separation of ownership and management | Shareholders own; directors manage | TCS owned by Tata Sons and public, managed by the board |
| Capacity to sue and be sued | Litigation in the company’s name, not in members’ names | Amazon India files trademark suits as the company |
| Regulatory framework | Subject to Companies Act, SEBI, sectoral regulators, tax law | ICICI Bank complies with RBI, SEBI, and the Companies Act |
1.5 Lifting the Corporate Veil
The doctrine of separate legal entity confers substantial benefits on shareholders, but it can also be abused. A controlling shareholder may use the corporate form to perpetrate fraud, to evade existing legal obligations, or to circumvent tax liability. In such cases, the courts may lift the corporate veil, that is, disregard the separate personality of the company and look at the persons behind it. The doctrine is a narrow exception to the rule in Salomon and is invoked sparingly.
The principal grounds on which the corporate veil has been lifted in Indian and English jurisprudence include the following.
NoteStatutory Lifting of the Veil
The Companies Act, 2013 itself provides for several situations in which the veil is lifted by statute, including the misrepresentation in a prospectus (Section 35), failure to repay deposits (Section 75), fraudulent conduct of business (Section 339), and ultra vires acts. In these situations, the personal liability of directors, officers, or members is imposed by the statute itself.
NoteJudicial Lifting of the Veil
Indian and English courts have lifted the veil in cases involving fraud or improper conduct, evasion of tax, evasion of contractual obligations, and where the company is a sham or a mere agent of its controllers. The leading Indian authority is Delhi Development Authority v. Skipper Construction Co. Pvt. Ltd. (1996), in which the Supreme Court lifted the veil to hold the controlling shareholders personally liable for the company’s wrongful conduct in collecting deposits from prospective allottees of property that the company did not own.
WarningThe Veil is the Rule, Lifting is the Exception
First-time students of corporate law sometimes assume that the corporate veil is a fragile shield that will be set aside whenever a creditor is dissatisfied with the company’s solvency. This is not correct. The veil is the rule, and lifting it is a narrow and reluctantly exercised exception. Courts will not lift the veil merely because the company is insolvent, or merely because the controlling shareholder is wealthy. There must be evidence of fraud, improper conduct, or a statutory ground.
1.6 Case Studies
1.6.1 Case Study 1: Reliance Industries Limited and the Separate Entity Doctrine
Reliance Industries Limited (RIL), incorporated in 1973 by Dhirubhai Ambani, is among the largest listed companies in India by market capitalisation. The Ambani family, through promoter holdings, exercises substantial influence over the company. Yet the company has, from its inception, been treated in law as a person separate from the Ambani family. When RIL has been sued, the Ambani family has not been a necessary party. When the Ambani family has been sued in personal disputes, RIL has not been answerable. The 2005 partition of the Reliance group between the brothers Mukesh and Anil Ambani was structured as a reorganisation of shareholdings and demerger of businesses precisely because, under the doctrine of separate legal entity, the brothers could not simply divide the company’s assets between themselves; the company’s assets belonged to the company.
Discussion Questions
- Why was a formal demerger necessary to divide the Reliance group between the Ambani brothers, rather than a private agreement to share the assets?
- To what extent does promoter control of a listed Indian company qualify the doctrine of separate legal entity in practice?
- If a creditor of one of the demerged Reliance entities is dissatisfied, can the creditor pursue the assets of the other demerged entity? Why or why not?
1.6.2 Case Study 2: The Satyam Computer Services Fraud and the Limits of the Corporate Form
In January 2009, the chairman of Satyam Computer Services Limited, B. Ramalinga Raju, confessed in a letter to the board that the company’s financial statements had been falsified over a period of several years, with non-existent cash and bank balances of approximately ₹5,040 crore reflected on the balance sheet. The fraud led to one of the most significant corporate governance failures in Indian history. The company’s auditors, board members, and senior executives were investigated and prosecuted; the company itself was effectively rescued through a government-supervised acquisition by Tech Mahindra Limited.
The Satyam episode illustrates that the company form is not self-policing. The features of separate legal entity, perpetual succession, and limited liability all operated as intended; the company survived its founder’s disgrace and continues today as Mahindra Satyam, now part of Tech Mahindra. But the protection of investors required the active intervention of the regulator (SEBI), the courts, the National Company Law Tribunal (NCLT) in its earlier form, and the government. The case is a reminder that the legal personality of the company creates the institutional space within which good governance must be practised; it does not, on its own, guarantee that good governance will be practised.
Discussion Questions
- Did the Satyam fraud disprove the doctrine of separate legal entity, or did the doctrine in fact work as intended by allowing the company to survive its founder’s wrongdoing?
- What additional features of the company form, beyond those discussed in this chapter, were tested by the Satyam episode?
- In what ways did the regulatory framework around the company form assist or hinder the recovery of value for the company’s investors?
1.6.3 Case Study 3: One Person Company and the Solo Entrepreneur
The Companies Act, 2013 introduced the concept of a One Person Company (OPC), under which a single natural person can incorporate a company with himself or herself as the sole member. The OPC must nominate another natural person as a successor in the event of the founder’s death or incapacity. The OPC structure preserves the essential features of the company form, separate legal entity, limited liability, and perpetual succession, while doing away with the procedural requirement of multiple members.
The OPC has been adopted by a growing number of solo professionals, consultants, and small entrepreneurs who want the protection of limited liability and the credibility of a corporate identity without the complexity of a private limited company with multiple members. By 2024, more than 50,000 OPCs had been registered in India.
Discussion Questions
- How does the OPC reconcile the historical association definition of the company (a body of persons coming together) with the statutory recognition of a single-member entity?
- What features of the company form are most valuable to a solo entrepreneur, and what features are least relevant?
- Should the OPC structure be expanded to allow corporate or foreign nominees, and what consequences might follow?
Summary
| Concept | Description |
|---|---|
| Foundational Concepts | |
| Company | A statutorily incorporated body of persons recognised in law as an artificial person, with a legal existence distinct from its members |
| Artificial Legal Person | A person created by law for legal purposes, capable of holding rights and bearing duties, but acting only through human agents |
| Section 2(20), Companies Act 2013 | Defines a company as one incorporated under the Companies Act, 2013 or under any previous company law, anchoring the concept to the act of registration |
| Scholarly Definitions | |
| Lord Justice Lindley | Defines a company as an association of many persons who contribute money or money's worth to a common stock and share the resulting profit and loss |
| L.H. Haney | Defines a company as an artificial person created by law, having a separate entity, perpetual succession, and a common seal |
| Chief Justice John Marshall | Describes a corporation in Trustees of Dartmouth College (1819) as an artificial being, invisible, intangible, and existing only in contemplation of law |
| Distinguishing Features | |
| Incorporated Association | A company comes into legal existence only on registration under the Companies Act, 2013 and the issuance of a certificate of incorporation |
| Artificial Legal Personality | The company is recognised in law as a person, distinct from natural personhood, and acts in its own name through directors and officers |
| Separate Legal Entity | The company is, in law, distinct from its members; their assets and liabilities are not the company's, and the company's are not theirs |
| Limited Liability | Member liability for the company's debts is capped at unpaid share capital or, in a guarantee company, at the agreed contribution on winding up |
| Perpetual Succession | The company's existence is unaffected by the death, retirement, insolvency, or insanity of any member; it ends only on formal winding up |
| Common Seal | Historically a metal die used to authenticate corporate documents; made optional by the Companies (Amendment) Act, 2015 |
| Transferability of Shares | Public company shares are freely transferable, providing liquidity; private company shares are subject to restrictions in the articles |
| Separation of Ownership and Management | Shareholders own the equity capital, but day-to-day management is delegated to a board of directors and through them to executive officers |
| Capacity to Sue and Be Sued | The company can institute legal proceedings and be sued in its own name, with judgments enforceable against company assets only |
| Regulatory Framework | Companies are subject to the Companies Act, 2013, SEBI regulations for listed entities, sectoral regulators, the Income Tax Act, and labour laws |
| Landmark Cases | |
| Salomon v. Salomon (1897) | Established that a company, once incorporated, is a legal person separate from its members, regardless of the motives of the incorporators |
| Lee v. Lee's Air Farming (1961) | Held that a controlling shareholder can also be an employee of the company, since the company is a separate legal person from its members |
| Macaura v. Northern Assurance (1925) | Held that a sole shareholder has no insurable interest in the company's assets; the assets belong to the company, not to the shareholder |
| DDA v. Skipper Construction (1996) | Indian Supreme Court authority for lifting the corporate veil to hold controlling shareholders personally liable for fraudulent conduct |
| Lifting the Corporate Veil | |
| Lifting the Corporate Veil | A narrow exception to the Salomon principle under which courts disregard the separate personality of the company in cases of fraud or sham |
| Statutory Lifting of the Veil | The Companies Act, 2013 itself imposes personal liability on directors, officers, or members in cases of misrepresentation, fraud, or non-repayment of deposits |