What is the test for standing in a corporation action?
Ontario, Canada
The following excerpt is from Cinapri v. Guettler, 1997 CanLII 12432 (ON SC):
The rule which the plaintiff’s counsel invoked is an old one, named for the case which gave it birth, the rule in Foss v. Harbottle. Simply stated, it means that a corporation is a legal entity distinct and separate from its shareholders. When a party decides to do business through a corporate form, even if he or she is the sole shareholder, it means not only what the corporation’s instigator no doubt wants - a limitation on personal liability - but it also means some limitation on that party’s personal rights. Therefore, it has been held that only a corporation has standing to bring an action for a wrong allegedly done to that corporation. Foss v. Harbottle (1843), 2 Hare 461 (U.K.).
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