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corporate law australia

Behind the Metaphor: Lifting the Corporate Veil

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Behind the Metaphor: Lifting the Corporate Veil

A company, as it currently stands, assumes a separate legal personality from its shareholders, using this metaphor to ‘hide’ its directors behind the ‘corporate veil.’[1] The purpose of this structure is to encourage entrepreneurship through the shifting of risks of business failure to the company’s creditors.[2] The courts are reluctant to lift this ‘corporate veil’, often leaving creditors in a disadvantaged position should the company fail.

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