limited liability, and conversely of piercing the corporate veil
192) That said, there remain circumstances in which it is conceivable that the doctrine of piercing the corporate veil
may be of significant utility in CFPOA enforcement.
While piercing the corporate veil
was designed for the corporation, state courts have uniformly applied the same standard for the other limited liability entities (Bainbridge, 2005).
These cases, however, failed to establish clearly the doctrine of piercing the corporate veil
for three reasons.
We conclude, however, that the doctrine of piercing the corporate veil
, and the distinctions drawn by the courts, may make more sense than at first appears.
The purpose of piercing the corporate veil
is "to decreas[e] the incentive created by limited liability to engage in overly risky activities.
Conflicting with this purpose are popular causes, such as environmental cleanup and massive class action award payments, which contradict immunity and require piercing the corporate veil
Piercing the corporate veil
refers to those exceptional cases wherein limited liability is lifted and the separate legal personality of corporations is disregarded such that the shareholder, which may be a parent corporation, is held responsible for a company's debts or actions.
11) Therefore, a non-shareholder individual can be personally liable for a corporation's debts if the two-prong test for piercing the corporate veil
Those in favor of piercing the corporate veil
are often (at least from their own point of view) justified in their efforts.
Agenda items include: - Rules of Thumb for Choosing a Business Entity - Piercing the Corporate Veil
- Self-employment Taxes for LLC Members & Managers - Choosing the State of Incorporation - Tax Issues in Executive Compensation - Mergers and Conversions of LLCs, LLPs and LLLPS - Statutory and Regulatory Compliance - Ethics - Frequently Asked Questions
Indeed, piercing the corporate veil
to impose personal liability for penalties for corporate tax reductions raises a plethora of questions about due process of law for employees and the companies by which they are employed.