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Shareholder Liability In Nova Scotia Unlimited Companies, Mohamed F. Khimji

Dalhousie Law Journal

Unlimited Companies incorporated under the Nova Scotia Companies Act (NSULCs) have, in recent decades, become recognized as tax efficient forms of business organizations. NSULCs differ from conventional business corporations in that their shareholders are exposed to liability for corporate obligations under the enabling legislation. This paper attempts to provide an analysis of the precise nature of unlimited liability faced by shareholders in such entities in response to recent bankruptcy litigation in the U.S. that raised the issue of the relationship between a shareholder's liability for a debt of the firm under the enabling legislation and under a contractual guarantee provided …