Corporate veil

Question 1

Definition of pre incorporation contract ?

Answer 1

A pre incorporation contract is a contract entered into by a person, acting on behalf of a non-existing, company, which is yet to be incorporated.
Pre incorporation contracts are regulated by the common law and the Act.

Question 2

explain the concept of lifting the corporate veil ?

Answer 2

The separate legal existence of a company may be ignored by the courts (called piercing or lifting the legal veil) in appropriate circumstances (as stipulated by the common law and legislation). The consequence of ignoring the separate legal existence of a company is that its members incur person liability or that a group of companies (holding and subsidiary companies) will be regarded as a single entity.