A legal term used in business. It covers an illegal act by an officer, director, or owner of a business operation. Often used in ‘Piercing the Corporate Veil’ for a creditor to gain access to the personal assets of the shareholder(s) of an incorporated business operation. If a fraudulent act occurs, the perpatrator does not receive protection under the law that the corporate sheild provides.
When shareholders invest into a corporation, there is an expectation of limited losses amounting to the financial investment made. However, if the company is not properly run, officers, directors and shareholders are exposed to the […]