LIECHTENSTEIN Law and Practice Contributed by: Matthias Niedermüller, Alexander Milionis and Fabian Rischka, Niedermüller Attorneys-at-Law
ter. Private knowledge is not attributed. This also applies to all employees and assistants working for a company. Finally, knowledge possessed by factual direc - tors is attributed to a company. As such, so is knowledge possessed by persons that factually take a leading role. Reverse Piercing of the Corporate Veil Liechtenstein case law recognises reverse pierc - ing of the corporate veil for situations when an ultimate beneficial owner (UBO) wants to set aside assets by contributing them to a legal entity (eg, a foundation), with the intent to abuse the principles of separation to the detriment of other parties. Reverse piercing means that claims against a debtor can also be asserted directly against the legal entity of which the debtor is the UBO or that was abused by the debtor to prevent access of creditors to such assets held by the company; thus, reverse piercing is considered an abuse of rights by the debtor according to Section 2 of the Persons and Companies Act. Hence, in the context of reverse piercing of the corporate veil, the company is regarded as the alter ego of the debtor. Further Limitation of Liability A legal entity will not be liable for any acts by a director that absolutely exceed the powers of any such director or the whole business purpose of the company. Internal regulations (ie, statutes, articles of asso - ciation, rules, and resolutions) do not limit exter - nal liability, unless the other party knew or should have known that a director or other representa - tives were acting against the law and internal rules but still co-operated with them.
Additional contractual exclusions and limitations of liability are possible to a wide extent. In cases of wilful damage such as fraud, an exclusion or limitation is never valid – regard - less of whether it is conducted by someone themselves or representatives (see 1.4 Limita- tion Periods ). Criminal Proceedings Against Corporate Entities According to Liechtenstein law, legal entities are even liable and subject to criminal law for felonies and misdemeanours committed by their managers. In the event of a conviction, the com - pany is ordered to pay a fine. The company and the acting manager et al may be prosecuted and convicted separately for the same offence at the same time. 3.2 Claims Against Ultimate Beneficial Owners According to the “separation principle” , only the company’s assets can satisfy the liabilities of a legal entity. Under certain circumstances, it is necessary and permitted in the interests of cred - itors’ protection to have recourse to the UBO behind the legal entity and to call on them to fulfil the obligations that the legal entity cannot fulfil. The mere (authorised) use of a corporate form provided by the legal system, however, does not constitute an abuse of rights. Rather, there must also be an intention to abuse the law. Notably, where legal entities have been used as vehicles to commit fraud, Liechtenstein case law recog - nises the concept of a piercing of the corporate veil. In such cases, the rights and obligations of a legal person are attributed to the natural person behind it.
258 CHAMBERS.COM
Powered by FlippingBook