Shareholder Liability for Corporate Debt

It is a basic principle of corporate law that shareholders, as such, have limited liability. In the absence of a personal guarantee given by a shareholder, a shareholder in his capacity as such is not liable for any act or liability of a corporation because the corporation is a separate legal entity. See Ontario Business Corporations Act, R.S.O. 1990, c. B.16, s. 92(1). To find that the shareholders of a corporation have departed from that basic principle, a claimant would have to establish the shareholders had agreed to assume personal liability for a corporation’s debts/liabilities. See Koubi v. Hascalovici, 2016 ONCA 867