ABSTRACT
Corruption is not specifi c to public sector. There are people and institutions that are out of control and aim to gain benefi t in private sector as well. Besides, some of those corrupt practices are caused by laws, according to some people, even rules encourage them. In private sector, the kind of corruption we encounter is usually fraud. Other kind of corruption is to escape from ethical and legal responsibilities consciously by using legal opportunities. In market, another kind of fraud that is done by escaping from responsibility is implemented through limited and joint-stock corporations and misuse of them. The common feature of these two types of corporations is that the shareholders are not responsible for the debts of corporations besides if they are not guarantors. If the corporation is not able to pay the debts, it will be liquidated and, based on the limited responsible principle; creditors will end up with nothing. In this article, corruptions that are encountered in practice and the reasons behind them are summarized. The following recommendations are given as solutions: (I) based on the “lift the curtain principle”, the barrier of legal entity will be removed, thus; it will be possible to render the shareholders liable for their debts, (ii) informing the market about legal and criminal sanctions which will be implemented to shareholders and managers who did not fulfi ll their legal responsibilities in order to protect the rights of payees during the process of incapable of paying the debts of capital corporation and encouraging these kind of practices, (iii) questioning philosophical and ethical issues related to conformity of aim of this artifi cial and modern type of corporation called capital corporation which is assumed to be formed by transformation of capital to legal entity and creating awareness in preferences of type of corporations.