Does Control Make a Difference? The Moral Foundations of Shareholder Liability for Corporate Wrongs

Jonathan Crowe*

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)


The doctrine of limited liability, as traditionally understood, prevents shareholders from being held personally liable for corporate wrongs. Several authors have recently argued that the doctrine should be modified to make some or all shareholders individually liable for torts committed by corporations in which they hold shares. This article distinguishes three types of argument that might provide a moral basis for shareholder liability in such cases. I contend that while these arguments support holding at least some shareholders liable for corporate torts, they fail to justify a general regime of unlimited pro rata shareholder liability. The level of control shareholders exercise over a company makes an important difference to their moral duties to compensate victims of corporate wrongdoing.

Original languageEnglish
Pages (from-to)159-179
Number of pages21
JournalModern Law Review
Issue number2
Publication statusPublished - 1 Mar 2012
Externally publishedYes


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