TY - JOUR
T1 - Extending Corporate Liability in New Zealand
AU - Gillman, Max
N1 - The date on your computer is in the past. If your computer's clock shows a date before 1 Jan 1970, the browser will automatically forget the cookie. To fix this, set the correct time and date on your computer.
PY - 1999
Y1 - 1999
N2 - New Zealand’s 1993 Companies Act defines reckless trading as when a director/manager induces a “substantial risk of serious loss to the company’s creditors”. The definition contrasts with international common and statutory law that holds managers personally liable only under circumstances of moral failing. It also allows for managers to be found liable for bad investments during the continued existence of a firm. Replacing the standard of moral failing with a standard of objective risk evaluation and allowing culpability beyond bankruptcy proceedings extends liability in a way that indirectly taxes corporations. This extension of liability stands contrary to the evolutionary development of the corporation as based on an efficient redistribution of property rights. It biases investment towards lower risk, lower yield ventures, and is expected to decrease New Zealand’s innovation‐driven economic growth
AB - New Zealand’s 1993 Companies Act defines reckless trading as when a director/manager induces a “substantial risk of serious loss to the company’s creditors”. The definition contrasts with international common and statutory law that holds managers personally liable only under circumstances of moral failing. It also allows for managers to be found liable for bad investments during the continued existence of a firm. Replacing the standard of moral failing with a standard of objective risk evaluation and allowing culpability beyond bankruptcy proceedings extends liability in a way that indirectly taxes corporations. This extension of liability stands contrary to the evolutionary development of the corporation as based on an efficient redistribution of property rights. It biases investment towards lower risk, lower yield ventures, and is expected to decrease New Zealand’s innovation‐driven economic growth
UR - https://www.emeraldinsight.com/doi/pdfplus/10.1108/03068299910215951
U2 - 10.1108/03068299910215951
DO - 10.1108/03068299910215951
M3 - Article
VL - 26
JO - International Journal of Social Economics
JF - International Journal of Social Economics
ER -