Question

Please describe the corporate veil and its purpose. What would happen if the law allowed shareholders to be sued for the actions of a corporation?

Answer 1

It is a legal concept that separate the company and shareholders,this protect the personality of company from shareholders but if it is necessary lifting of corporate will be done and owners will be sued if it is needed according to the case of law, lifting of corporate veil is only take place when the person is personally liable for the obligation.

If shareholders believe that management (directors or officers) are making decisions that are contrary to the best interests of the corporation and its shareholders, then the shareholders can bring a derivative suit against management.