An officer of a company who diverts company activities to another company in its ownership will be personally liable for company debts

Investors in a company demanded that a shareholder in the company, who was also a manager therein, personally repay their shareholder loan given to the company, after diverting the company's operations to another company under her sole control.
The Court accepted the claim and held that the manager acted in bad faith and therefore she has personal liability to repay the funds to the investors. A company is a separate legal entity than its shareholders or officers. However, in some cases personal liability may be imposed on shareholders or officers of the corporation due to actions such as where an officer acted fraudulently or breached the obligation to act in good faith. Here, the manager acted in bad faith because she knew that the investors' rights depended on the profits of the company and yet used their money for her own benefit by transferring the investment money with the company's operations to another company under her sole proprietorship and even had the audacity to later contend that the investors were not entitled to receive their money back due to lack of profit in the company.