Veil-piercing

Abstract

This chapter focuses on strategies that, in a broad sense, set the principle of limited liability aside in order to reach (the assets of) the natural or legal persons that benefit from corporate activity. These concepts are complementary to the ex ante strategies discussed in previous chapters. They are ex post in the sense that they will be triggered only if and when the former have failed for some reason. Their aim is to internalize as far as possible the social cost of corporate activity in order to set appropriate incentives for corporate decision-making. The legal concepts under consideration are largely standard based with open textured norms whose application heavily depends on the factual settings in every individual case. Consequently, the challenge is to provide workable criteria and coherent guidance for courts in order to ensure predictability for entrepreneurs and their legal advisers.