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TABLE OF CONTENTS I. INTRODUCTION 2 II. THE CONCEPT OF LIMITED LIABILITY 3 III. WHY LIMITED LIABILITY? 3 IV. AREAS OF CONCERN 3 I) MORAL HAZARD 3 II) IMMORALITY 3 III) CLOSELY HELD COMPANIES 3 IV) GROUPS OF COMPANIES 3 V) TORT CREDITORS 3 V. CURRENT REGULATION AND THE NEED FOR REFORM 3 I) RULES RELATED TO SHARE CAPITAL 3 II) IMPOSING LIABILITIES ON MANAGERS OR SHAREHOLDERS 3 III) JUDICIAL VEIL PIERCING AND GROUP OF COMPANIES 3 IV) SMALL BUSINESSES, TORT CREDITORS: REVOLUTIONARY REFORMS? 3 VI. THE WAY AHEAD 3 I. Introduction The institution of limited liability for companies has typically been regarded as one of the most important innovations of the late industrial revolution period. This view was appropriately expressed by one early commentator, who stated: "The limited liability corporation is the greatest single discovery of modern times... Even steam and electricity are less important than the limited liability company"1. Commentators generally consider that limited liability has been proved a vital instrument in the attainment of economic growth. However, recent analysis of the limited liability principle have questioned its potential...

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