Abstract
This note examines a new rule imposing personal liability on shareholders for the outstanding taxes due by their corporation, in particular, whether the rule is efficient as a means of controlling opportunistic behaviour. As the new rule disregards the fundamental principle of limited liability, it has far-reaching implications for equity investment. In this regard, the note considers the potential cost of the rule and critically assesses the adequacy of legal safeguards provided for by the legislator.
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