Dance of the Corporate Veils: Shareholder Liability in the United States of America and in the Republic of Turkey

Abstract

The foundation of corporate law is the existence of a legal entity separate from its shareholders, thus shielding shareholders from liability for corporate obligations. Courts have rarely, and with trepidation, pierced through this corporate veil to impose liability on shareholders for corporate malfeasance. These instances have become more common in recent decades, suggesting that corporate investors and parent corporations acquiring subsidiaries need to be diligent to minimize their risk. In this article two academicians discuss the consequences of wrongdoing and mismanagement underlying the pros and cons of the systems adapted by both countries.