Corporate Veil

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Corporate Veil

The legal separation of a corporation from its shareholders. That is, because of the corporate veil, shareholders are not responsible for paying the debts of the corporation (beyond the level of their own investment) and generally are not legally liable for any crimes the corporation might commit. While the corporate veil protects shareholders, it may be disregarded under certain circumstances, notably if a shareholder assisted the corporation in the commission of a crime. See also: Piercing the corporate veil.
References in periodicals archive ?
Since funds have been secretly transmitted to, and parked or utilized in foreign countries behind corporate veils, and since the disclosures have been made by a reputable international body of investigative journalists, the category of persons named in the Panama leaks is distinct and stands apart.
or its designated members, to lift all corporate veils, access all bank accounts, offshore companies and accounts, stock exchange accounts, corporate registers including registers of shareholders and directors, land and estate records (by whatever name or nomenclature called in any given jurisdiction), and the facilitation of the Committee
The Commission shall direct the Respondent to give a mandatory authorization by an irrevocable general power of attorney empowering the Committee and/or its designated members, to lift all corporate veils, access all bank accounts, offshore companies and accounts, stock exchange accounts, corporate registers including registers of shareholders and directors, land and estate records (by whatever name or nomenclature called in any given jurisdiction), and the facilitation of the Committee/Member by the Respondent by any other means that may be required by any foreign jurisdiction, governments, authorities or officials concerned and such facilitation may include the signing of any documents, forms, applications, requests or authorizations required;
(41) Thus far, in all the veil-piercing cases concerning one-person companies in China, the corporate veils have been set aside by the courts.
(28) At its most basic, penetrating the corporate veil prevents shareholders from being insulated from personal responsibility for liabilities incurred by the firm.
Formally recognizing veil piercing ends more than a decade of uncertainty over whether Chinese judges can pierce corporate veils. However, the new law is incomplete and introduces new problems.
(2) This development was much anticipated by Chinese and foreigners alike, as China's previous corporate law was unable to keep pace with its fast-growing economy) One of the highlights of the new Company Law is its formal establishment of the concept of "piercing the corporate veil" in Chinese law.
Canny, The Capital Shareholder's Ultimate Calamity: Pierced Corporate Veils and Shareholder Liability in the District of Columbia, Maryland, and Virginia, 37 CATH.
Judge Cardozo once famously described the concept of piercing the corporate veil as being "enveloped in the mists of metaphor." (1) Despite the passage of eighty years, his colorful description of corporate veil piercing continues to be as timely and relevant as ever.
The court decided to "reverse pierce" the entities' corporate veils, and found that the working interests in the gold mine were not securities.
We can have anti-tax haven legislation and authorities should pierce the corporate veils keeping every entity documented.
Because the client is not expected to emerge from bankruptcy, there is an emphasis on maintaining the corporate veil, which frees stockholders and managers from liability for corporate debts.

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