The true legal position in regard to the character of a Corporation or a Company which owes its incorporation to a statutory authority is that:
(i) The Corporation in law is equal to a natural person and has a legal entity of its own.
(ii) The entity of the Corporation is entirely separate from that of its shareholders.
ADVERTISEMENTS:
(iii) It bears its own name and has a seal of its own.
(iv) Its assets are separate and distinct from those of its members.
(v) It can sue and be sued exclusively for its own purpose.
(vi) Its creditors cannot obtain satisfaction from the assets of its members.
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ADVERTISEMENTS:
(vii) The liability of the members or shareholders is limited to the capital invested by them.
(viii) The creditors of the members have no right to the assets of the Corporation.
However, in the course of time, the doctrine that the Corporation or Company has a legal separate entity of its own has been subject to certain exceptions by the applications of the fiction that the veil of the Corporation can be lifted and its face examined in substance.
ADVERTISEMENTS:
The doctrine of the lifting of the veil, thus marks a change in the attitude that law had originally adopted towards the concept of the separate entity or personality of the Corporation.
As a result of the impact of the complexity of economic factors, judicial decision has sometimes recognised exceptions to the rule about the juristic personality of the Corporation.
It may be that, in course of time, these exceptions may grow in number and to meet the requirements of different economic problems, the theory about the personality of the Corporation may be confined more and more.