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 blade of the law. This is known as piercing the corporate veil. Therefore it is critical for any shareholder, director, or officer of a small corporation to understand what is required to protect your personal assets from exposure to creditors and the long arm of the government.
Self-Dealing is an illegal activity of making business decisions or creating systems to benefit the owner over all other parties. It usually generates increased risks for creditors that they did not anticipate in their lending decision. Most often, self-dealing in business is carried out via some illegal or fraudulent act.