Piercing the corporate veil: when LLCs and corporations may be at risk

Tareq Na’el Al-Tawil, Zayed University

Document Type

Article

Source of Publication

International Journal of Law and Management

Publication Date

4-4-2019

Abstract

© 2019, Emerald Publishing Limited. Purpose: The purpose of this paper is to examine the available judicial precedence using both the United Arab Emirates and UK laws to bring up a much broader understanding of wrongful and fraudulent trading concepts and provide a critical analysis of potential personal liabilities of directors in the UK and UAE jurisdictions for the acts of fraud and mismanagement. Design/methodology/approach: This paper seeks to understand corporate fraud from the aspect of trading. It will take an in-depth look into wrongful trading and fraudulent trading in the UAE and UK jurisdictions while analyzing the punishment for the same. The study will also look at famous cases for the same while seeking to understand the mitigation measures undertaken in various nations across the world. Findings: The author studies the contents and provisions of the UK Insolvency Act 1986, truly the concepts of wrongful trading and fraudulent trading are not explicitly mentioned in the UAE Law, but the said terms associated with “lifting of corporate veil” are notionally existent under the UAE Federal Law No2/2015, otherwise known as Companies Law (Articles 84 and 162-1), and under the UAE Bankruptcy Law (Federal Decree Law No. 9 of 2016), which provides legislation governing trading while the company is insolvent. Originality/value: In the current paper, the author is keen to examine the available judicial precedence to bring up a much broader understanding of the mentioned concepts and provide a critical analysis of potential personal liabilities of directors in the UK and UAE jurisdictions for the acts of fraud and mismanagement.

ISSN

1754-243X

Publisher

Emerald Group Publishing Ltd.

Volume

61

Issue

2

First Page

328

Last Page

344

Disciplines

Business

Keywords

Fraudulent trading, Lifting the veil of incorporation

Scopus ID

85067207028

Indexed in Scopus

yes

Open Access

no

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