All of the following factors were used to determine whether the alter ego charge applies: Courts have not traditionally applied the alter ego doctrine to other forms of business, such as partnerships and limited partnerships, because partners generally do not enjoy the same form of limited liability as shareholders. officers and directors. In comparison, however, owners of limited liability companies can structure their business in the same way as a corporation, so members and managers are protected from personal liability for the debts of the limited liability company (LLC). Several courts have found that the alter ego doctrine can also apply to LLCs. For example, in Kaycee Land & Livestock v. Flahive, 46 pp.3d 323 (Wyo. 2002), the Wyoming Supreme Court ruled that the fairness doctrine of breaking the veil was a remedy available under the Wyoming Limited Liability Company Act. In India, the position on corporate criminal liability became clear in Standard Chartered Bank and Others v. Directorate of Enforcement and Others, which stated that „a company can be prosecuted for the crime even if the act can be committed through its representative.” In addition, in Iridium India Telecom Ltd. v. Motorola Incorporation et al., applying the doctrine of attribution and imputation, it was held that „the group of persons who direct and control the affairs of the corporation or corporation are considered to be the alter ego of the corporation.
The criminal intent of the alter ego of the company, i.e. the person or group of persons directing the activity of the company would be included in the company. In Sunil Bharti Mittal v. CBI et al., the court, acting through a special judge in applying this doctrine, held that directors and directors can be regarded as the alter ego of corporations and that the shares of corporations are attributable to them and imputable. The Special Judge held that, by virtue of the capacity in which they act, these directors may be regarded as the persons who control the affairs of the corporation and the directing spirit and will of the respective corporations. Later, this decision was challenged in the Supreme Court. The Supreme Court rejected the Special Judge`s order, finding that it would run counter to the principle of vicarious liability, which sets out the circumstances in which the management of a company can be held liable. The Special Judge applied the doctrine in the opposite direction, but the Apex Tribunal concluded that the alter ego principle can only be applied in one sense, namely to hold the corporation responsible for an act committed by a person or group of persons who control the affairs of the corporation, since they represent the alter ego of the corporation; However, it cannot be applied in the other direction to engage the liability of the directors of the company for a criminal offence committed by the company in the absence of legal provisions. Analysis The owners of the limited liability company can structure their business in the same way as a corporation, so members and managers are protected from personal liability for debts or criminal liabilities of the company. It is difficult to distinguish the personality of an individual from that of the company because an individual is considered the alter ego of the company. Therefore, certain compelling circumstances and elements of the record must be present in court to invoke the alter ego doctrine.
In addition, this doctrine must be included as a legal provision governing the conduct of the company. Endnotes # In re Phillips, 139 pp.3d 639, 644 (Colo. 2006) # 297 NY 285, 292 (1948) # Rohmer Assoc., Inc. v Rohmer 2007 NY Slip Op 00030 (36 AD3d 990) # Sheffield Servs. Co. v. Trowbridge, 211 pp.3d 714, 720 (Colo. App. 2009) # [1971] UKHL 1 # Sweeney, Cohn, Stahl & Vaccaro v. Kane, 6 A.D.3d 72, 75 (2nd Dept. 2004).
# Sunil Bharti Mittal v. Central Bureau of Investigation, RIA 2015 SC 923. # Lennard`s Carrying Co. v. Asiatic Petroleum Co [1915] AC 705. # Sunil Bharti Mittal v. Central Bureau of Investigation, RIA 2015 SC 923. # (2005) 4 CSC 405 # AIR2011SC20 # AIR2015SC923 # Kaycee Land & Livestock v. Flahive, 46 pp.3d 323 (Wyo. 2002) The alter ego is a legal doctrine by which the court states: that a company does not have an identity distinct from an individual or a corporate shareholder. The court applies this rule to ignore the corporate status of a group of shareholders, officers and directors of a corporation with respect to its limited liability.
The alter ego finding gives the court a reason to break the corporate veil and hold individual shareholders personally liable for the company`s debts. The doctrine of the alter ego is based on the assumption that the company and the shareholders and the chief executive officers are alter egos of each other, that is, that one is a shadow or reflection of the other or can be understood as two sides of the same coin.