piercing the corporate veil


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piercing the corporate veil

A theory used to reach the assets of individual shareholders when there is a judgment against a corporation but the corporation has no assets to satisfy the judgment. In general, if the shareholders operated a business in complete disregard of the corporate form,meaning they never had shareholder meetings,never voted on anything,never used the corporate name on stationary or paperwork, commingled personal funds and corporate funds, and generally behaved as if the corporation did not exist, then a court will impose personal liability for corporate debts.

References in periodicals archive ?
Part II provides a brief overview of the doctrine of piercing the corporate veil. Part III argues that the Supreme Court's treatment of corporations as associations of citizens is a radical departure from the Court's treatment of corporations in all other areas of the law.
Piercing the corporate veil. New York, NY: Clark Boardman Callaghan.
consideration would be especially helpful in piercing the corporate veil
Because the standard for piercing the corporate veil varies by state, (55) balancing tests are frequently used instead of bright-line rules.
Levantamiento del Velo Corporativo Latinoamericano: Aspectos Comparados con el Derecho Estadounidense (Piercing the Corporate Veil in Latin America: Comparative Aspects with U.S.
The early recognized grounds for piercing the corporate veil were agency (28) and use of the corporate structure for an improper purpose.
(99) Indeed, the court in such a case would be committing the very sort of casual (and improper) failure to respect the integrity of the corporate form and formalities that, when committed by shareholders of closely held companies, is occasionally criticized by the courts and cited as justification for piercing the corporate veil.
(1) In general, piercing the corporate veil means that the separate legal personality of the corporation--the so-called veil--is disregarded.
piercing the corporate veil and vicarious liability are ex post
In the case in which a Canadian parent incorporates a foreign subsidiary with the intent of using the subsidiary to commit corrupt acts abroad and in the hope of insulating itself from liability under the CFPOA, a Canadian court could be justified in piercing the corporate veil to hold the parent directly liable for the ensuing corrupt acts of the subsidiary.
The court was justified in piercing the corporate veil and injuncting the company because the company was being used to defeat Mr Home's pre-existing obligations.
Lawyers refer to this as piercing the corporate veil and it is rarely accomplished because each corporation is expected to stand on its own in all legal proceedings.