The Necessity Of Piercing Corporate Veil Doctrine In Uzbek Corporate Law

Utkirbek Kholmirzaev

doi:10.37547/tajpslc/volume02issue12-13

Abstract

This article discusses the distribution of liability risks of shareholderss and other controlling persons on corporate liabilities. Given the analysis of ex post and ex ante model of control over distribution of risks of civil turnover participants in common law and continental legal traditions. Also, considered problems of shareholders' liability on obligations of corporations in the Republic of Uzbekistan. A shareholder shall be held liable on a subsidiary basis for the obligations of the legal entity in case of insolvency, as a result of the member's wrongful acts. However, some mechanisms of such liability do not allow to resolve the issue fairly.

Highlights

The concept of a legal entity, separate from its participants is recognized in all developed legal orders of common and continental law
It should be noted that due to the unsystematic and flawed legal structure of the liability of persons controlling society: The risk of liability is incorrectly distributed between the participant and the bona fide creditors; The controlling participant is "encouraged" or not liable for damage caused as a result of his illegal actions; An unfair shareholder got benefits from his illegal actions by using the privilege - "limited liability" of the company, which is intended for completely different purposes; It is allowed to abuse the corporate form, using it as a "shell"; The rights and interests of creditors are not protected and are legally protected, which are less valuable than the rights of a private owner
- are fragmentary and scattered, rather than systemic. Most importantly, it does not ensure a fair distribution of risks, does not allow ensuring stability and does not deter unfair participants from abusing the corporate form

Summary

INTRODUCTION

The concept of a legal entity (corporation), separate from its participants (shareholders) is recognized in all developed legal orders of common and continental law. It should be noted that due to the unsystematic and flawed legal structure of the liability of persons controlling society: The risk of liability is incorrectly distributed between the participant and the bona fide creditors; The controlling participant is "encouraged" or not liable for damage caused as a result of his illegal actions; An unfair shareholder got benefits from his illegal actions by using the privilege - "limited liability" of the company, which is intended for completely different purposes; It is allowed to abuse the corporate form, using it as a "shell"; The rights and interests of creditors are not protected and are legally protected, which are less valuable than the rights of a private owner

CONCLUSION

Fuқarolic ҳuқuқi