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CSEET · Business Laws and Management · Elements of Company Law

Which of the following is a statutory (as opposed to judicial) instance in which the Companies Act, 2013 imposes personal liability on members or officers, in effect disregarding the company's separate personality?

A statutory instance of lifting the veil is personal liability of persons for fraudulent conduct of business, or of members carrying on business after membership falls below the statutory minimum. Property ownership, perpetual succession and suing in its own name are consequences of separate personality.

  1. APersonal liability for fraudulent conduct of business or when membership falls below the statutory minimum and the company carries on businessCorrect
  2. BA company's right to hold property in its own name
  3. CA company's perpetual succession
  4. DA company's ability to sue and be sued in its own name

Explanation

The Act imposes personal liability on persons for fraudulent conduct of business, and for carrying on business after membership drops below the minimum. The other options are features of separate legal personality, not exceptions to it.

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