Photo of Varsha Yogish

Consultant in the Finance Team at the Bangalore office of Cyril Amarchand Mangaldas. Varsha advises on insolvency and bankruptcy matters. She has earlier worked as a law research associate at the National Company Law Tribunal, Bengaluru Bench. She can be reached at varsha.yogish@cyrilshroff.com

 Group Insolvency Norms

The recognition of a company’s separate juristic personality by the UK’s House of Lords in its landmark ruling in Salomon v. Salomon A Company Ltd.,[1] remains the basis for modern corporate law.[2] The ruling in effect drew a corporate veil around the legal personality of the company thereby establishing the separate legal identity of a corporate.

While India also follows the separate juristic personality of corporates as a general principle, exceptions have been incorporated over the years by way of legislative action[3] and juridical pronouncements.[4] In the context of insolvency law, the corporate veil is typically lifted in instances where a group company could be held liable for the debts of its associate and subsidiary companies, or if a group of companies functioned as a collective.
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