It is said that the separate legal personality model “configures the institution of current corporate law. Any particular cases of this guideline should therefore be seen as difficulties for such institutions. “Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay As a general principle, corporations are recognized as separate legal entities by their liability of the entity and not of the shareholders, directors or officers who own and/or act for the entity. So the way the law challenges the principle of separate legal personality is through a procedure called lifting the corporate veil. Section 9 of the Companies Act, 2013 codifies that a company is a legal entity in its own right. Correct. However it was the landmark UK case, Salomon v Salomon & Co. Ltd in 1897, which initially addressed the issue of separate legal personality in court, and furthermore the guidelines and standards of separate legal personality and ultimately chose that the legitimate analogy of society The veil had to be recognized by law. The separate identity of a company is a legal advantage and must be used for honest and good-natured business purposes, so to speak. In the event that a false and unscrupulous use of the legal person is made, the interested parties will not be allowed to defend themselves behind the corporate personality. The Court will go through the corporate shell and apply the so-called "revocation or piercing of the corporate veil" rule. The Court will look behind the corporate substance and move as if there is no element isolated from the individuals and will put the individuals or persons they control at risk for obligations and commitments of the company. Statutory recognition of lifting of corporate veil The Companies Act, 2013 itself contains certain provisions [Articles 7(7), 251(1) and 339] which lift the corporate veil to obtain genuine powers of business. Article 7, paragraph 7 provides for the punishment for establishing companies using false information; Section 251(1) manages the risk of making a false application to have the company name removed from the company register and Section 339 manages the requirement for false direct management of affairs during liquidation. Please note: this is just an example. Get a custom paper now from our expert writers. Get a Custom Essay Since the decision in Salomon v. Salomon and Co. Ltd., (1897) AC 22, courts are often hesitant or otherwise extremely cautious in lifting the veil of corporate personality to see the genuine people behind it. For that matter, the courts have found it important to ignore the separate personality of a corporation in the attendant circumstances.