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The Corporate Liability

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Added on  2019-09-30

The Corporate Liability

   Added on 2019-09-30

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1.How is corporate liability different from liability under respondent superior? AnswerLiability under respondent superior means that if the employee of a company doesany negligent acts or they do any omissions, then the employer is responsible for that.When the torts are committed in any business, then the business has to bear that costof doing business and hence the liability is of the employer (Achtenberg, 1983). But in the corporate liability, there are areas and acts defined for which thecorporation is held liable for the acts and the omissions that the people in it do. Unlikethe ‘Liability under respondent superior’, the corporation is not held responsible forALL the acts and omissions done by the employees. 2.Why is the concept of piercing the corporate veil important to any corporation?AnswerPiercing the corporate veil means that the limited liability of the shareholders,directors etc. is pit aside by the court and they are held personally accountable for thedebts and the actions of the corporation (Barber, 1980). It is important to anycorporation because sometimes the people at the top management of the company tryto personally benefit from the earnings of the company and in the name of thecompany; they try to escape from the personal liabilities. So, by conducting this act ofpiercing the corporate veil, these people can be exposed and the company can besaved from the losses and from getting its image tarnished.
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