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I don't know about other countries, but in Irish law, in theory, limited liability only applies if you're trading in good faith. Fraudulent trading, for instance, strips the liability and the directors are liable for the debts of the company.
Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders or directors. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may "pierce" or "lift" the corporate veil.


To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis
by Migeru (migeru at eurotrib dot com) on Mon Nov 14th, 2011 at 05:19:16 AM EST
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