The process by which the court disregard the separate legal personality of a company or a close corporation in order to hold individuals liable is known as?
Question: The process by which the court disregard the separate legal personality of a company or a close corporation in order to hold individuals liable is known as?
The process by which a court can disregard the separate legal personality of a company or a close corporation to hold individuals liable is termed "piercing the corporate veil." This legal action allows for the personal liability of directors, officers, or shareholders for the company's debts and obligations, which typically would not extend beyond the corporate entity. The courts may resort to this measure in cases of fraud, abuse, or when the company is a sham or has been used as an alter ego of the individuals. It is a remedy applied to prevent misuse of the corporate structure to evade legal obligations and to ensure justice. Piercing the corporate veil is not taken lightly and is only used in exceptional circumstances where it's necessary to prevent injustice or the abuse of corporate privileges.
Rjwala is your freely Ai Social Learning Platform. here our team solve your academic problems daily.
0 Komentar
Post a Comment