Director's Liability under thr Doctrine of Piercing the Corporate Veil: The Director's Liability for Corporate Debt

The doctrine of piercing the corporate veil fascilitated holding directors liable for corporate debt. Nevertheless, the doctrine is not a seperate cause of action. Directors are bound by fiduciary duty, duty of loyalty and duty of care and skill to the corporation and its shareholders. However, there is not such a contractual relationship between directors and creditors. Thus, requiring directors to compensate creditors should be justified on tort law. In the Iranian, French and American legal systems, fault-based liability is the cause of action for director's liability. The author found that in piercing cases, director's liability follows the traditional rules of fault-based liability unless specified otherwise by statute as strict liability.