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Which of the following is a recognised ground for 'lifting the corporate veil'?
AThe company earns large profits
BThe company is listed
CThe company has many shareholders
DThe company is used to evade tax or to defraud creditors or defeat the law
Answer & Solution
Correct answer: D. The company is used to evade tax or to defraud creditors or defeat the law
Courts lift the veil to determine enemy character, to protect revenue/prevent tax evasion, to prevent fraud or defeat of law, and where a subsidiary is a mere agent.
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