The phrase "corporate veil" refers- fictitious barrier that divides the firm from people who run it and those who own it. The primary benefit of incorporation is that the firm becomes a separate legal entity with limited liabilities. In actuality, the individuals who constitute the association are the ones who do business on behalf of the incorporated organisation. That is, while a corporation is a separate entity in the eyes of the law, in actuality, it is a group of people who benefit from the corporate personality. As a result, granting firms legal personality at the time of incorporation is a privilege.
However, there may be occasions where fraudulent or criminal behaviours are conducted in the shadow of this.The corporate image must be taken away to reveal the genuine perpetrators because artificial creatures are incapable of conducting any illegal or fraudulent acts. The lifting of the corporate veil is a premise that runs counter to Salomon's prevailing rule. As a result, lifting the corporate veil is used to learn about the facts hidden beneath the corporate veil. Despite the fact that it contradicts the rule in Salomon, it does not render the rule invalid. The concept posits the existence of a corporate identity that can be lifted in the interest of the entire membership or in the public good in order to identify and hold those who abuse the privileges bestowed upon them accountable. When the judge or legislature chooses to maintain the separation of the company's and members' personalities, the veil of incorporation is regarded to be removed.
“As a result, the piercing (or lifting) of the corporate veil refers to the possibility of looking beyond the company framework to hold members liable, as an exception to the general rule that they are protected by corporate law.”