Tuesday, May 30, 2017

Principle of Lifting the Corporate Veil

Principle of Lifting the Corporate Veil

What is a ‘company’?

Before learning about the principle of lifting the corporate veil, it is expedient for us to understand what acompany is, as the principle applies only to the corporate world. The term ‘company’ is actually a derivative of Latin term ‘companis’. If we break this term, we get ‘com’ which means to ‘together’ and ‘panis’ which means ‘bread’. Hence, the term companis means a number of persons who eat together. But this was the ancient approach, where people used to form groups, only for purpose of filling their bellies. Modern day recognizes ‘company’ as group of persons, working together for purpose of carrying out a commercial or industrial activity.
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