Examining judicial decisions, if any, state whether corporate veil can be lifted where the acts of the company are in avoidance of welfare legislation.

Lifting of Corporate Veil: The separate personality of a company is a statutory privilege and it must be used for legitimate business purposes only. Where a fraudulent and dishonest use is made of the legal entity, the individuals concerned will not be allowed to take shelter behind the corporate personality. The Court will break through the corporate shell and apply the principle/doctrine of what is called as "lifting of or piercing the corporate veil". The Court will look behind the corporate entity and act as though no entity separates from the members existed and make the members or the controlling persons liable for debts and obligations of the company. Avoidance of welfare legislation Avoidance of welfare legislation is as common as avoidance of taxation and the approach in considering problems arising out of such avoidance has necessarily to be the same and, therefore, where it was found that the sole purpose for the formation of the new company was to use it as a device to reduce the amount to be paid by way of bonus to workmen, the Supreme Court upheld the piercing of the veil to look at the real transaction. (The Workmen Employed in Associated Rubber Industries Limited, Bhavnagar v. The Associated Rubber Industries Ltd., Bhavnagar and another, A.I.R. 1986 SC 1) The corporate veil, therefore, can be lifted where the acts of the company are in avoidance of welfare legislation.