When is the veil of incorporated be lifted?

Answer 1

You may be referring to the judicial practice of "piercing the corporate veil". One of the reasons for organizing and conducting commerce through a corporation is liability limitation, Thus, there has to be provision for when a corporation is organized in contemplation of the use of, or is used for, fraudulent or other unlawful purposes.

There is a multiplicity of situations in which the corporate veil might be pierced. Corporations generally cannot be used as a "shield" behind which an individual can "hide" in order to do something that, when done by the individual without the purported involvement of the corporation, would be unlawful.

Probably the primary situtation wherein a court might be persuaded to pierce the corporate veil is where the corporation has been too thinly capitalized than would be deemed as reasonably needed to conduct the commerce the nature of which is contemplated. In situations such as this, the shareholders or officers could therefore be held personally liable for the commercial conduct of the corporation.