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 ?
Because the standard for piercing the corporate veil varies by state, (55) balancing tests are frequently used instead of bright-line rules.
41) Use of the corporate form to avoid pre-existing obligations is clearly the most egregious of the specifically identified abuses of the corporate form and has thus been regarded by some as the primary or even sole justification for piercing the corporate veil.
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.
Hui Huang, Piercing the Corporate Veil in China: Where Is it Now and Where Is it Heading?
administrative advantages over piercing the corporate veil and the
Nonetheless, there exist at least two reasons why reliance on the doctrine of piercing the corporate veil should not be the first port of call for Crown prosecutors seeking to attribute the corrupt practices of a foreign subsidiary to a Canadian parent.
39) In so doing, the court relied upon a decision from the Northern District of California, which held that a responsible corporate officer cold be personally liable under the CWA, even where the typical factors necessary for piercing the corporate veil were not met, because "individuals whose acts or omissions have led to the pollution may be held responsible individually, notwithstanding the fact that they may have been acting in their capacity as an employee or officer of a company or entity that owns the property in question or conducts business on it.
2 million judgment by piercing the corporate veil of a small construction company.
The variance in states' approaches to successor liability and to the related doctrines of alter ego or piercing the corporate veil are one of the reasons that the federal courts have adopted a uniform federal common law of these subjects under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA).
The article will first provide a brief overview of the two most important attributes associated with the selection of a business structure as well as the concept of piercing the corporate veil.
The concept of piercing the corporate veil is a longstanding feature of the corporate law of capitalist economies.
The Article will next focus more fully on the theories that allow for piercing the corporate veil.