Penetrating the Veil of Corporation

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In all circumstances, company directors are protected by the veil of incorporation from personal liability for company obligations. Is this statement true or false? Discuss. The veil of incorporation ensures that a company is a separate legal entity from its directors and shareholders, thus protecting the personal assets of owners and investors from lawsuits. This is so that owners and investors are able to minimize their risk. A company director is also elected by them to manage the company in its best interest. The director is to act honestly and to carry out his duty in good faith and never misuse company information. The company director must maintain a professional attitude and act in good faith or else he may face personal liability in certain circumstances which include but are not exclusive to making false inaccurate statements or omissions in prospectuses, failing to appoint company secretary or incurring debts when the company has little prospect of repaying them. This essay will cover the circumstances where company directors are not protected by the veil of incorporation. The Rene Rivkin case was a criminal case. Most criminal offenses pierce the veil of incorporation; some examples are recklessly or intentionally failing to act in good faith to protect the interests of the company, dishonestly using the position of the director within the company either intentionally or recklessly to gain an advantage or dishonestly using company information either intentionally or recklessly to gain an advantage. In this essay I will be explaining the limitations of the veil of incorporation[1]. Such circumstances where a director is to face personal liability is misusing company information. Rene Rivkin was the director and chairman of his own company and was sentenced to nine months of weekend detention and fined $30,000 after being found guilty of insider

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