A company is a legal entity in its own right. It is an entity in law, it has a legal personality in its own right and is separate
from its shareholders however it is possible that this protection given to directors and shareholders can be removed
by the courts. This is known as lifting or piercing the corporate veil and occurs when the presence of the corporate
veil would create a substantial injustice. The Companies Act provides for the corporate veil to be lifted in cases of reckless trading,
the corporate veil may also be lifted in cases of tax evasion or avoidance or look into sham transactions using the corporate
façade to hide the true nature of a transaction.
Whilst the above sounds and is a serious affair for both directors and shareholders, avoidance of such risk comes with properly managing the compliance and administrative affairs of the company.