"Alter Ego" is a derived term from Latin. Literally
translated, it means the "Other I". More colloquially it
can be understood as the second self or a person's clone. It is
a common tenet that a company is a separate legal entity from its
shareholders and directors. This common law principle grants
immunity to the shareholders and directors from being held liable
for the debts as well as criminal liabilities of the corporation.
The doctrine of alter ego, however, provides for an exception to
this presumption in law. Alter ego is the doctrine which prevents
the stakeholders of the corporation, i.e., shareholders and
directors from taking the refuge of doctrine of separate legal
entity. Hence, the Doctrine of alter ego is based on lifting of the
corporate veil between the directors/ shareholders and the
corporation and treating both as one entity.
