When can the corporate veil be lifted under the Corporations Act to make directors liable for corporate debts?

The corporate veil is like a curtain between the legal entity of a firm and the identity of the director. It distinguishes these two. Some of the circumstances under which the corporate veil can be lifted under the Corporations Act include:

• When the director permits the firm to engage in trade while the company is in the condition of insolvency, they will be held liable.
• When a firm engages in non-commercial transactions, then the corporate veil will be lifted, and the directors will be held liable.

In these situations, veil doctrine commands the lifting of the corporate veil, which makes the director liable for paying off debts of the creditors of the company. Therefore, in these types of situations, despite the limited liability of a company, the director held personally liable for the debts.