Theory of piercing the corporate veil Based on Islamic Rules with a Brief Look at British Judicial Procedure

Subject Areas : Economic jurisprudence and Banking

mohammad rajabali damavandi ¹ , pezhman piruzi ² , shokouh namdar ³ , mahshid sadat tabaie ⁴

1 - PhD student , Department of Private Law Group, Shahr-e-Qods Branch,Islamic Azad University,Tehran,Iran
2 - Assistant Professor, Department of Private Law Group, Shahr-e-Qods Branch,Islamic Azad University,Tehran,Iran , (Responsible author)
3 - Assistant Professor, Department of Private Law Group, Taft Branch,Islamic Azad University,Yazd,Iran
4 - Assistant Professor, Department of Private Law Group, Tehran Electronic Branch,Islamic Azad University, Tehran ,Iran

Received: 2021-10-02 Accepted : 2021-12-22 Published : 2022-06-22

Keywords: Fraud", No harm", ", piercing the corporate veil",

Abstract :

AbstractIn corporate law, the rule that a company has a separate legal personality from the partners is a fundamental rule. Separation of the legal personality of the company from the partners and the limited liability of the partners towards the debts of the company has caused the companies that are subject to the limited liability system of the partners to provide suitable coverage for high-risk and sometimes fraudulent activities of the partners. This puts the company's property and assets at risk, but at the same time the risk of such risks is due to the limited liability of external partners and is imposed on the company's creditors. The rule of law veiling in English law is a guarantee of fair enforcement, which removes the legal personality of the company and abolishes the rule of limited liability of controlling partners and their direct liability to creditors. In Iranian law, citing Islamic rules such as no harm, prohibition of abuse of rights (Article 40 of the Constitution) and the rule of prohibition of fraud, the theory of piercing the corporate veil can be applied to these rules. In this article, first the rule of piercing the corporate veil is explained and then the judicial procedure of England and Iran is examined by referring to the rules of jurisprudence and common law