Jayanta Bandyopadhyay 01 October 2024
Family owned business houses have floated differnt formats of business entities- Pvt Ltd Co, LLP, Unlisted Public Ltd Co-where the main head of the Family owns 99.95% shares , while others hold meagre balance shares.
Is it not subject to "Lifting of Corporate Veil " or it is legally ok?
The major stakeholder is drawing salary, profit sharing while giving loan to various entities.
T. Kalaiselvan, Advocate (Advocate) 01 October 2024
The Companies Act provisions allow the lifting of corporate veil under various sections for punishing those who act fraudulently behind the cover of a company.
The corporate veil protects the shareholders and officers of the company but when the concept of a separate entity is misused and any fraudulent or illegal activity takes place, under such circumstances, the veil is lifted to punish the actual offender.
If you have evidence for any such fraudulent acts or misappropriation of fundes etc., you may initiate action against the fraudsters as per law.
Jayanta Bandyopadhyay 02 October 2024
All shareholders are family members. Unless there is family dispute, vertical split, everything is under carpet.
Highlighting issue will cost employment.
Query is that whether cross holding of shares in various entity format, everything within family and it's controlled entity are legally OK? 25 plus entities are controlled by one family. There are only inter Co transaction before export.
Please guide
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