a. The “veil of incorporation,” also known as the corporate veil, refers to the legal distinction between a company as a separate entity and its shareholders or directors. Established in the landmark case of Salomon v. Salomon & Co. Ltd (1897), it means the company is treated as a distinct “person” with its own rights and liabilities, separate from those of its owners. In Ghana, this is enshrined in the Companies Act, 2019 (Act 992), Section 12, which states that upon incorporation, a company becomes a body corporate capable of suing, being sued, and holding property independently.

b. The benefits of the corporate veil include:

• Limited Liability: Shareholders’ liability is limited to their investment (unpaid shares), protecting personal assets from company debts. This encourages investment in banking ventures; for example, shareholders of Access Bank Ghana are not personally liable for the bank’s loans gone bad.
• Perpetual Succession: The company continues despite changes in ownership or death of members, ensuring stability. In Ghanaian banking, this allowed GCB Bank to survive ownership shifts without disrupting operations.
• Ease of Raising Capital: Separate entity status facilitates share issuance and borrowing. Banks like Stanbic Bank Ghana leverage this to issue bonds or attract foreign investment under BoG’s Capital Requirements Directive.
• Property Ownership and Contracting: The company can own assets and enter contracts in its name, simplifying transactions. This is crucial for banks holding securities or entering loan agreements.
• Tax and Regulatory Advantages: Separate taxation and compliance, though in Ghana, post-2019 cleanup, BoG emphasizes piercing for governance issues.

These benefits promote entrepreneurship and economic growth, but require ethical management to prevent abuse.

c. The corporate veil may be lifted (removed) in exceptional circumstances to hold individuals accountable, either by statute or court. In Ghana:

• Statutory Lifting: Under Act 992, Sections 13 and 314, for fraudulent trading or wrongful acts during winding up. Also, BoG under Act 930 can lift for banking supervision if directors misuse the veil.
• Judicial Lifting: Courts lift when the company is a sham, e.g., for fraud (Gilford Motor Co. v. Horne, 1933), or agency relationships. In Ghana, cases like Morkor v. Kuma (1998-99) SCGLR lifted for justice. In banking, during the 2017 cleanup, veils were effectively lifted to hold directors of UT Bank accountable for insider lending abuses.