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Pierce the Corporate Veil

There are several events that will cause a judge to disregard the corporate entity or "pierce the corporate veil." There are several reasons why the corporate veil may be pierced. There are also several easy steps you can do to avoid the corporate veil from being pierced.

The corporate veil can be pierced if a party is tricked or misled into dealing with the corporation rather than an individual. Whenever the corporation does correspondence with a third party, the officers and directors of that company need to make it clear that they are acting on behalf of the corporation and not themselves individually. All the documents need to clearly be entered into
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If the corporation is set up to never make a profit or always be insolvent it is considered too "thinly" capitalized. This could be when the corporation is formed without sufficient capital
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When the corporation fails to follow corporate formalities where the corporation is located, it can be pierced. A few of the corporate formalities are meetings, minutes, stock ledger. If the corporate entity fails to do some of these duties the judge can
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The biggest mistake small corporations usually make is not keeping separate accounts for the corporation. If an individual moves funds from their
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If the corporation is engaged in illegal enterprise where it is
discount Michael Kors ruled that the corporation was setup as a sole means for those involved to partake in an illegal activity, the corporate veil can be pierced. For instance, a corporation
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While it is possible for the corporate veil to be pierced, if you take the proper precautions when setting up your corporation you will help to protect your own personal assets. A few of the steps to protecting
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