The limited liability principle in corporate law is not absolute in India. The Companies Act, 2013, the Income Tax Act, the GST Act, the Insolvency and Bankruptcy Code, 2016 and other statutes create specific circumstances in which a director may be held personally liable for a company's obligations. Directors who do not understand these liability triggers — particularly around TDS defaults, GST defaults, employee provident fund contributions, fraudulent trading, and personal guarantees — face personal financial exposure that the corporate structure does not protect against. Understanding when and how personal director liability arises is the first step in managing it.
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