Author name: KnowGro

The Doctrine of Lifting the Corporate Veil is a legal concept that allows the courts to disregard the corporate personality and look beyond the legal façade of a corporation or business entity. A company is a legal entity having a separate identity from the persons incorporating it. A company’s separate legal entity is a legal privilege that should be used only for lawful business activities.

The term “Alter Ego” is a Latin word which means the “Other I”. It is an accepted fact that a company is a distinct legal entity separate from its shareholders and directors. By virtue of this common law principle, shareholders and directors are shielded from debts, civil and criminal liability against the company. However, the notion of alter ego allows for a legal exception to this presumption. The Doctrine of Alter Ego forbids the company shareholders and directors from seeking protection under the doctrine of a separate legal entity. The Doctrine of Alter Ego can be used to lift the corporate veil between the directors/shareholders and the company to treat both as one entity.