The concept of alter ego is a common law principle and has further developed by the judicial pronouncements. A company is deemed to be one and the same as the owner of the company and vis a vis. Owners and the persons who manage the affairs of the company are considered as the alter ego of the company because there is such a unity of interest in the ownership that the separate personality of the company and the owner or shareholder does not exists. Since the business owner and the corporation are alter egos, they are merely two sides of the same coin.” “When a corporation has been so dominated by an individual or another corporation and its separate entity so ignored that it primarily transacts the dominator's business instead of its own it will be called the individual’s alter ego. This doctrine was further explained in the case of International Aircraft Trading Co.
The term alter ego can be described as the part of someone’s personality that is usually not seen by the others. Individual who has formed a corporation is a part of the personality of the corporation and such separate personality of the individual cannot be seen without lifting the corporate veil. If the owner, managing directors, or the shareholders use the corporation as an instrumentality to do their own personal business or to achieve any wrongful gain they may be held personally responsible for the acts done under the shield of corporate veil by applying the doctrine of alter ego. Piercing The Corporate Veil And Doctrine Of Alter Ego. This advantage has certainly resulted into a disadvantage to the creditors and others who have certain interest in it as one can use a corporation as a “mere shell” in an attempt to further his own business rather than the business of the corporation and to avoid his personal liability. One of the Advantages of such tenet is that it provides shareholders, directors and other officers of the corporation with limited liability protecting them from the obligations and acts of the corporations. The basic tenet of the corporation law is that the corporation is a separate legal personality apart from its owner and managing directors. the principle of alter ego can only be applied in one direction that is to make the company liable for an act committed by a person or group of persons who control the affairs of the company as they represent the alter ego of the company The term alter ego can be described as the part of someones personality that is usually not seen by the others.
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