In many foreign countries, directors are personally liable if they allow a company to continue to conduct any business while it is insolvent. What are the reasons for imposing personal liability on the directors of an insolvent company? Although directors are not personally liable for all business conducted by an insolvent company in the United States, is it ethical for the directors of an insolvent company to allow the company to continue to transact business in the ordinary course?

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Reasons for Imposing Personal Liability on Directors of an Insolvent Company 1 Creditor Protection Personal liability encourages directors to act resp... View the full answer