Corporate Insolvency and the Protection of Creditors
Mohammad Rizal Salim
Nottingham University Business School, Malaysia Campus
August 27, 2009
UiTM Law Review, Vol. 3, p. 143, 2007
The primary purpose for the doctrine of separate legal personality is to encourage entrepreneurship, by shifting the risks of business failure away from entrepreneurs to creditors and other risk bearers. Unfortunately this doctrine is subject to abuse by corporate controllers, which prompted the courts and the legislature to provide for exceptions. These exceptions are better known as the lifting or piercing of the corporate veil. How do these exceptions protect creditors? How effective are they? This article seeks to examine laws in relation to the separate legal personality doctrine and the duties of directors which directly affects, or attempts to protect, creditors from unfair and improper conduct by corporate controllers. This is Part II of II.
Number of Pages in PDF File: 24
Keywords: Corporate insolvency, corporate governance, Malaysia
JEL Classification: K00, K20, K40
Date posted: August 31, 2009
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