ACCA Applied Skills · Corporate and Business Law (Global) · Corporations and legal personality
Under some legal systems, statute allows the corporate veil to be lifted in defined situations. Which of the following is the most typical statutory example in company law?
A director being made personally liable for fraudulent trading is the typical statutory example. Statute allows the court to look behind the company and require those knowingly carrying on business to defraud creditors to contribute to its assets personally.
- AA director being made personally liable for fraudulent trading by the companyCorrect
- BA shareholder being entitled to dividends declared by the company
- CA company being allowed to change its name by special resolution
- DA company being permitted to hold its own meetings electronically
Explanation
Statutory provisions on fraudulent or wrongful trading allow a court to order those knowingly party to the carrying on of business with intent to defraud creditors to contribute to the company's assets. This looks through the company to the individuals. The other options are routine company law rights unrelated to lifting the veil.
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