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August 2014

Piercing the corporate veil - in reverse

A corporation is regarded by the law as a separate legal entity, separate from its shareholders or directors, so the liabilities of the corporation are not the liabilities of the shareholders. Courts will sometimes "pierce the corporate veil" and find shareholders liable for the debts of the company, in special circumstances. In the recent decision of Borden Ladner Gervais LLP v. Sinclair and others, however, this cross-liability was reversed.

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