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Topic: Piercing the corporate veil

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	Piercing the Corporate Veil (Site not responding. Last check: 2007-11-03)
		The plaintiff in such an action seeks to extend the liability of the corporation to the shareholders, on the basis that they are shareholders and that the law on "piercing the corporate veil" applies to the circumstances involved in the lawsuit.
		In a 1950 case involving a divorce, the plaintiff wife was allowed to pierce the corporate veil of the husband's corporation because the court found that the corporation was formed to enable the husband to reduce his income and thereby to reduce the amount of payments to the ex-wife.
		Overall, if your corporation is sued, you should anticipate that the plaintiff may seek to have you named personally in the lawsuit, claiming that you are liable as a shareholder because you have failed to maintain the separate identity of the corporation.
	www.bizadvisor.com /pierce.htm (1334 words)

	Piercing the corporate veil - Wikipedia, the free encyclopedia
		The corporate law concept of piercing (lifting) the corporate veil describes a legal decision where a shareholder of a corporation is held personally liable for the debts of the corporation despite the general principle that those persons are immune from suits in contract or tort that otherwise would only hold the corporation liable.
		Corporations exist in part to shield their shareholders from personal liability for the debts of a corporation.
		Prior to the invention of the limited liability corporation in the 17th century, any partner in a general partnership could be held responsible for all the debts of the corporation.
	en.wikipedia.org /wiki/Piercing_the_corporate_veil (1388 words)

	Piercing Corporate Veil
		This is also known as piercing the corporate veil and is the most frequent method for holding the shareholders liable for the acts of a corporation.
		In attempting to pierce the corporate veil, a plaintiff is pursuing two claims; one concerning the claim against the corporate entity and a second to hold individual shareholders liable for the corporation’s debt or wrongdoing.
		Moreover, where a party knows of the relationship between a corporation and its shareholder and chooses freely and voluntarily to deal with them in their respective capacities, he is estopped to claim that the corporation is the alter ego of the individual (or the reverse thereof).
	www.gibson-gruenert.com /article02.htm (3761 words)

	Piercing the Corporate Veil: Focusing the Inquiry - Law Firm Krendl Krendl Sachnoff & Way, Professional Corporation ...
		The basis for piercing the corporate veil in that case was therefore that the controlling shareholder was directly participating in or directing the subsidiaries’ wrongful conversion of plaintiff’s property.
		The comparison between agency and corporate veil participation is similar to the comparison between common law fraud and corporate veil misrepresentation in that the facts establishing the respective types of claims are similar but the plaintiff’s burden of proof is somewhat less onerous in the corporate veil theory.
		Should the veil of one corporation (a subsidiary, for example) be pierced to reach the assets of another corporation (the parent), the personal assets of the shareholders of the parent corporation are still protected by the parent’s corporate shield.
	www.krendl.com /CM/Publications/Piercing-Corporate-Veil.asp (17541 words)

	DivorceMag: Piercing the Corporate Veil in Matrimonial Proceedings
		Piercing the veil is something normally done in regular corporate litigation to subject the owners to personal liability.
		The husband's separate identity from his professional corporation was considered, in that case, to be merely a legal fiction, and the court allowed the corporation to satisfy the husband's maintenance obligation.
		Piercing the veil is somewhat of an estoppel theory; in other words, if someone treats the corporation or the corporate assets as his own assets, he should be estopped from claiming it is a separate entity at trial.
	www.divorcemag.com /IL/proforum/corporateveil.html (845 words)

	Piercing the Corporate Veil (Site not responding. Last check: 2007-11-03)
		Under some circumstances, those to whom the corporation is liable will attempt to "pierce the corporate veil", the legal term used to describe an action to have the corporation set aside for purposes of the litigation such that personal liability attaches, and personal assets can be reached.
		As the precise facts and circumstances which can result in a piercing of the corporate veil will vary depending upon state law, and as this is a fact-dependent inquiry, it is important to consult with a qualified lawyer when evaluating whether the corporate veil may be pierced in any specific case.
		A court may also pierce the corporate veil to prevent a fraud, where the corporation is found to be a "sham" meant to facilitate fraud against third parties.
	www.expertlaw.com /library/business/corporate_veil.html (424 words)

	!Piercing the Corporate Veil (Site not responding. Last check: 2007-11-03)
		As a general proposition, parent corporations and their subsidiaries are separate and distinct entities and are presumed not to be sufficiently intertwined to result in the parent being held liable for the acts of its subsidiaries.
		In general, in order for the corporate veil to be pierced under this theory, there must be some causal connection between the evidence of intertwining and the conduct for which the remedy of veil piercing is sought.
		1996) (the court held that the parent corporation and its subsidiary were not interrelated, and declined to pierce the corporate veil, where the plaintiff’s "only direct involvement with [the parent] at the time of her layoff was her participation in [the parent’s] pension plan.").
	www.alaskabar.org /index.cfm?ID=5148 (3515 words)

	How to Avoid Piercing of Your Corporate Veil - Click&Inc Shows You!
		First, the corporate veil is always disregarded by courts for criminal acts of the officers, shareholders, or directors of a corporation.
		For most other matters, the corporate veil is most often pierced by courts in situations where the shareholders of a corporation disregard the legal separateness of the corporation and the corporation acts as nothing more than an alter ego for the shareholders' own dealings.
		Corporate minutes are the first line of defense against the IRS, creditors, and other parties making claims against the corporation, particularly if a claim is based on a theory that the corporation should not be taxed as a corporation or afforded limited liability (piercing the corporate veil).
	www.clickandinc.com /corporate_veil.asp (1042 words)

	Corporate Veil
		If the corporate formalities are not followed, the corporation may be deemed to not be functioning as a corporation, but rather, as the alter ego of the owners.
		To prevent the corporate veil from being pierced, it is important to keep minutes of the board meetings and to not co-mingle bank accounts.
		Besides cases involving the piercing of the corporate veil, individuals may be held personally liable for a corporation's debt in some cases of defective incorporation and improper signing of documents.
	www.quickmba.com /law/corporation/corporate-veil (705 words)

	Corporate Denial (Site not responding. Last check: 2007-11-03)
		The term "Piercing the Corporate Veil" is a legal one which identifies the process where a court removes the protection provided individual members of a corporation for criminal activity, and makes these members responsible for their own actions.
		Corporations are made of living, breathing men, all with the same ideas and purposes, so we can look upon them with the same limitations as the individual, and that is their jurisdiction is confined to the lawful area of their creation.
		The bottom line of the affidavit denying the existence of corporations is that it pierces the corporate veil by an individual, and for the same purposes; the criminal activities of the courts themselves.
	www.wealth4freedom.com /law/corp-veil.htm (3579 words)

	WLJ - Court should decide corporate veil issue
		Where state law requires a finding that a corporate veil must be pierced to prevent injustice or inequity, the decision whether to pierce the veil is for the court to decide, rather than the jury, the Seventh Circuit held on Jan. 23.
		The court concluded that piercing the corporate veil is a form of equitable relief, stating, “piercing of the corporate veil on an alter ego theory is available only where failing to provide such relief would promote injustice or inequity.
		Accordingly, the court held that, notwithstanding the factual questions, the doctrine of piercing the corporate veil is essentially an equitable doctrine not amenable to determination by jury.
	www.wislawjournal.com /archive/2004/0128/veil-0128.html (662 words)

	SSRN-Piercing the Corporate Veil, Financial Responsibility, and the Limits of Limited Liability by David Millon
		The scope of limited liability should instead be restricted to cases of corporate insolvency that occur in spite of shareholders' good faith efforts to manage their firm in a manner that respects creditor interests.
		As to contract creditors, this means realistic evaluation of the corporation's ability to repay a debt at the time it is incurred and avoidance of actions that unreasonably increase the risk of default thereafter.
		Once the appropriate limits of limited liability are understood, courts can pierce the corporate veil in order to hold shareholders personally liable for losses that result from their irresponsible behavior.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=451520 (676 words)

	Piercing the Corporate Veil
		In matters involving a lawsuit by an injured party, especially if a corporation has no significant assets, the plaintiff will attempt to convince the court that the corporate entity should not be respected and that the principals of the company should be personally liable.
		In these cases, the plaintiff is attempting to pierce the corporate veil in order to obtain a judgment against the principals, who may have personal assets sufficient to satisfy a judgment.
		One of the major problems with the corporate format for small businesses is that as a matter of course the shareholders, officers, and directors will be named in any lawsuit against the corporation.
	www.rjmintz.com /piercing-the-corporate-veil.html (707 words)

	Arizona attorneys; FREE legal forms and much more!
		Piercing the corporate veil is not easy, but in some situations it is not difficult because the owners of the corporation do such a bad job of forming or maintaining the corporation.
		Accountants who incorporate corporations are generally more familiar with tax issues than with arcane legal concepts such as "piercing the corporate veil." Paralegals may know how to fill out forms, but it is doubtful any paralegal is knowledgeable about the intricacies of piercing the corporate veil doctrine.
		A corporation that is undercapitalized at inception or that is the alter ego of its principals may be an easy target for a piercing the corporate veil claim.
	www.goodmanlaw.com /www/pierceveil.htm (843 words)

	Alto-Ego Allegations Require Expert Accounting Assistance
		The purpose of "piercing the corporate veil" is to prevent the abuse of corporations, and thereby protect creditors who might otherwise not be paid.
		Piercing the corporate veil is a common law doctrine that is recognized in all 50 states.
		Because of this, corporate veil cases are often expensive to litigate.
	www.fulcruminquiry.com /Corporate_Veil.htm (794 words)

	GROKLAW
		If a plaintiff can prove that the corporation it is suing abused the privilege of doing business as a corporation to perpetuate a wrong against the plaintiff, a court can intervene by piercing the veil.
		The corporate veil was pierced in that case.
		Piercing the corporate veil is only a worry if you are being sued, not when you are suing someone else, and only when the business doesn't have enough money to pay for any liabilities.
	radio.weblogs.com /0120124/2003/07/09.html (2887 words)

	First American - 'Piercing the Corporate Veil' of a Limited Liability Company
		At least one court (albeit in an unreported decision) has held that, under the appropriate circumstances, it may "pierce the corporate veil" of the LLC and hold the members personally liable for wrongs done to third parties.
		The court stated further that "[t]he instrumentality and identity rules may be applied in order to 'pierce the corporate veil' of a limited liability company." Id. at *29 (citations omitted).
		The court held that, under the tests enunciated in both the instrumentality rule and the identity rule, probable cause existed to support the plaintiffs' breach-of-contract claims and their request to pierce the corporate veil of Hobby II to reach the assets of Hobby I, Hobby, and Leiendecker.
	www.firstam.com /content.cfm?id=2906 (1929 words)

	Piercing the Corporate Veil
		Piercing the Corporate VeilOfficers, directors and controlling shareholders have a general fiduciary duty of loyalty and care which should govern all their corporate conduct.
		The Alter Ego Doctrine is intended to prevent individuals or other corporations from misusing the corporate laws by the device of a sham corporate entity formed for the purpose of committing fraud or other misdeeds.
		For example, if the corporation cannot pay a creditor's proven debt or a court judgment claim, the individuals who own and manage the corporation can be held personally responsible for company obligations, even though they have given no previous personal guarantees.
	www.smallbusinessaid.net /piercing-the-corporate-veil.html (428 words)

	Texas Lawyer - Piercing the Corporate Veil and Notifying Insurance Carriers
		During the divorce proceedings, Kymberly sought to pierce the corporate veil of the businesses, which could make James' interest in the businesses part of the marital estate and thus subject to division.
		In the first appeal, the 4th Court found that the trial court improperly pierced the veil of the corporate entities, because the evidence was legally insufficient to support a finding of alter ego in a divorce case.
		the spouse's improper use of the corporation damaged the community estate beyond that which might be remedied by a claim for reimbursement.
	www.law.com /jsp/tx/PubArticleTXELA.jsp?id=1155732411549 (1809 words)

	DCBA Brief, May 2006 - Piercing the Corporate Veil and Holding a Non-Shareholder Liable in Illinois? (Site not responding. Last check: 2007-11-03)
		All too often practitioners encounter the insolvent corporate entity, often in the scenario where the entity is controlled by a non-equity holder specifically for purposes of avoiding liability.
		In sum, the Illinois Court of Appeals has clarified the process for piercing the corporate veil and made clear that a non-shareholder of an Illinois corporation can be held personally liable for the debts of the corporation.
		Thus, while the usual case involves a director, officer or shareholder of a corporation, the lack thereof, in an unusual case such as Fontana, does not preclude an Illinois court from imposing liability upon an individual by piercing the corporate veil if the evidence demonstrated the requisite level of control.
	www.dcba.org /brief/mayissue/2006/art10506.asp (794 words)

	Catania & Catania - Attorneys At Law - Tampa
		Generally, business entities such as corporations or limited partnerships are legally separate and distinct from the shareholders and members who compose them.
		This concept is known as “piercing the corporate veil.” A variation on the idea, called reverse piercing of the corporate veil, allows someone to reach the assets of the business entity to satisfy a claim or judgment obtained against a corporate insider.
		Recently, a state supreme court approved the use of “reverse piercing” to allow two creditors of an individual to use the assets of a limited partnership controlled by that individual to satisfy his personal debts.
	www.cataniaandcatania.com /news.asp?NewsletterID=9 (300 words)

	SSRN-Piercing the Corporate Veil: Shareholder Liability for Corporate Torts by Lucas Bergkamp, Wan-Q Pak
		We then focus on what veil piercing is, and discuss the grounds on which courts pierce, and should or should not pierce, the corporate veil and impose liability for corporate debts on shareholders.
		Unlimited shareholder liability is closely related to veil piercing and can be viewed as institutionalized or generalized veil piercing.
		We conclude that veil piercing is an exception to limited liability that covers mostly cases that are or could be resolved under the principles of director and officer liability and fraudulent conveyance.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=270023 (351 words)

	Operation Clambake presents: Piercing the Corporate Veil (Site not responding. Last check: 2007-11-03)
		This special task force discovered and documented that the corporation situation was indeed a mess and that the assets of scientology were at serious risk.
		The RRF scam corporation, and the over-incorporation and proliferation of CSC throughout the world, meant that the CSC entity owned and controlled all scientology, and since Hubbard controlled CSC, there was a direct link and a direct risk to Hubbard personally and to the majority of scientolology assets worldwide.
		The effect that this new corporate structure had was to seemingly successfully hide scientology's primary assets from the IRS and from successful litigants who had won claims against the CSC entity.
	www.xenu.net /archive/IRS/corp_veil.html (1572 words)

	massachusetts corporations,Piercing the Corporate Veil, C, Sub S, business law, boston corporate attorneys, litigation ...
		Here is a list of some of the things alone or in combination that can strip you of asset protection and result in "piercing the veil" of your corporation.
		Failure to issue the corporate stock or maintain the stockholders' ledger (in Massachusetts the incorporator is personally liable for all corporate debts until stock has been issued!)
		Corporate compliance is crucial to maintaining your corporation.
	www.hamill-law.com /pierce_corporate_veil.html (263 words)

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