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Frequently asked questions > Company > Business Corporation > What is the main disadvantage for a shareholder for not getting involved as a director in a business corporation and how to limit the effects of this disadvantage?

What is the main disadvantage for a shareholder for not getting involved as a director in a business corporation and how to limit the effects of this disadvantage?

Both in Canada and in Quebec, the main disadvantage comes from the fact that the directors of the business corporation can abuse their position in certain situations. They can take more important risks, particularly when they are not themselves shareholders, because they do not risk monetary losses by the decrease in the value of their shares.

It is possible to limit these possibilities of abuse in two ways: on one hand, by the adoption of statutory measures and on the other hand, by lifting the corporate veil.

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