One of the most fundamental principles of Canadian corporate law is that a corporation has a legal personality distinct from its shareholders. At common law, shareholders were precluded from bringing their own action in respect of a wrong done to the corporation. Even majority or controlling shareholders had no personal cause of action for a wrong done to the corporation.

One of the first things to happen when the relationship between a minority shareholder and the majority goes bad is that the minority is often denied information about the business. This may include being denied access to corporate records that are essential for any shareholder to know what is going on in their company. It is very common in oppression cases for a minority shareholder to be, or claim, that he or she has been “excluded” from the business. Being cut-off from corporate information can certainly be a form of exclusion. When the minority shareholder is not part of management, or has been excluded from management, the lack of information concerning the business can leave the shareholder completely in the dark about what is happening at the business and how it is performing financially. This is untenable for someone who has an ownership stake in the business – it is also contrary to the law.

But I incorporated..... that is what Darren Convery must have thought when the judge found him personally liable for a company debt. Why do people incorporate companies? One of the main ones is that generally, if a company does business, no employee or officer of the corporation is personally liable for any act done within the scope of their duties on behalf of the corporation. Now there are some exceptions to that general rule that could result in personal liability even if the business is incorporated. Let’s take one example where a careless mistake may prove very costly