Essay On Piercing The Corporate Veil
PIERCING THE CORPORATE VEIL
Meaning of ‘Piercing the Corporate Veil’
Starting a limited liability company is always advantageous since directors are not directly liable for any debts that may be incurred by the business. When the corporate veil is pierced, this protection seizes and the business directors and, or shareholders are legally responsible for company liabilities.
‘Piercing the corporate Veil’ is therefore the legal removal of what separates the shareholders from the corporation itself. The Corporate Veil can also be referred to as a legal standing through which corporate owners are protected from the debts and liabilities of a company.
Why pierce the corporate veil?
Goods and services may have been supplied to a particular company
…show more content…
To argue the case out, the services of an experienced litigation attorney should be sought.
What would happen if the court pierces the corporate veil?
Most courts are very cautious when it comes to holding shareholders liable for the liabilities of the company. As such, beyond-doubt proof must be provided to indicate that the company’s corporate veil has been pierced. With proof, there will be loss of protection and liable parties will be responsible for any company debts.
Parties not part of fraudulent activities are not punished, only the ones responsible for the undertakings that led to piercing the corporate veil will be lose legal separation of their assets to those of the company. The assets will then be taken from them to reimburse creditors.
Why the corporate veil should not be pierced
It may not be a good reason to pierce the corporate veil. Courts do not prefer it either as it portrays the company as a sham. A bad public image of the company may hurt consumer trust and the economy as a whole. Several other alternatives must be sought first and piercing the corporate veil taken as a last resort
Court Case Of John And Timothy Rigas
771 Words | 4 PagesIn the case of Adelphia, the individuals found guilty in this case neglected their duties as managers and their duties to the SHAREHOLDERS. With the positions as Chairman of the board of directors, President, and Vice President, they all had "fiduciary duties to both the corporation and its shareholders" Beatty & Samuelson (2016). The SEC's suit against them for multiple frauds on different counts, did not protect them from the BUSINESS JUDGEMENT RULE based on the fact that they weren't acting in good faith by putting the company in debt and manipulating statements to conceal the
Lindner Fund V. Abney Case
251 Words | 2 PagesIn the case Lindner Fund v. Abney there was a corporation located in Phoenix, Arizona called Texscan Corporation. This company was audited by Coopers & Lybrand (Cooper) in which reviewed financial records. One of the investors of Texscan was Lindner Funds and after receiving and reviewing the audited financial material from Texscan, Lindner Funds made the decision to invest in Texscan. But there was an unknown reason Texsca, suffered financial difficulties and Lindner suffered as well.
In Wells Fargo Scandal, The Buck Stopped Well Short Summary
498 Words | 2 PagesMs. Tolstedt decided to retire in July, 2016 when the investigation was moving toward finality. Wells Fargo allowed Ms. Tolstedt to retire and take with her around $125 million in stock options while around 5300 of her former employees are getting fired for their part of the fraudulent activities. The author feels Wells Fargo did an injustice to society and Ms. Tolstedt’s former employees by allowing her to retire and take all of her stock options with her, since she should have been
Dbq Essay On Companies Are Changing The World
736 Words | 3 PagesCompanies such as Apple have made a big impact on the world and our lives. Apple has affect our lives by changing the way we do things, for example, we started listening to music differently in 2010. Google also has an impact on our lives also, like the way use our emails which happen around 2009. General Electric provides electric and it has a big impact on how we use appliances.
Enron Analysis Essay
887 Words | 4 PagesEnron Analysis Enron is a great play which presents a dry story about business in a colorful and cartoonish way and impressed me with a variety of elements, including video, music, choreography, and dance. This is a play depicts the spectacular collapse of a Texan energy giant-Enron. As an audience, I witnessed how a business empire was built on shadows, accruing debts of 38 billion dollars and finally going bust in this two hours and thirty minutes play. In the following passage, I will describe, analyze, and interpret this play both about its script, including characters and plots, and its production, such as the videos, stage props and customs.
Pinto Fire Case Summary
1096 Words | 5 PagesThe company can damage reputation, hard to get a good relationship with business, and fear company’s bad image can effect on their brand if they have an unethical
Income Smoothing Case Study
1491 Words | 6 PagesThis proves that throughout the case, Cendant Corporation wasn’t acting fully ethical nor with the desired fiduciary actions to their investors and the auditing team in this case being Ernst&Young. Aside from the trust being broken apart between both, there was never a sign of an internal control inside Cedant. Therefore, there shows that the corporate governance for Cendant Corporation didn’t have signs of existence as well. Most frauds that were occurring before the implementation of the SOX-2002, had top management such as in Cendant that didn’t have care for the ethical performances as much as in today’s corporate world with more regulations in hand by the government. At the end, Cendant had filings against them concerning their corporate governance
Bears Are Us Organizational Structure
490 Words | 2 Pages“This protection is typically referred to as the ‘corporate veil’ or ‘corporate shield’” (Scrofano). Under the LLC code, “Bears Are Us” will realize every benefit of the informal structure of the partnership, but will be better shielded from liability. The company may further benefit from the formally organized and publicly recognized status of the limited liability company
Compare And Contrast Vermont And The State Of Texas
791 Words | 4 PagesThere are laws and regulations that corporations are to follow and they know what they are doing before they are caught. They have the best attorneys at their defense, there punishment of having to repay back millions tarnishes their image, and people lose confidence and do not
Onion Rhetorical Analysis Essay
503 Words | 3 PagesThe Onion’s article effectively attacks the ethos used by companies by demonstrating how far advertisers will go to convince people into buying their dubious
Essay On Fiduciary Duty
1765 Words | 8 PagesWheeler v. The Pullman Iron & Steel Co. provides the particular evaluation standard. It establishes that “The majority of shares of its stock… must be permitted to control the business of the corporation in their discretion,” so long as it does not violate the law or corruptly subvert the rights of a shareholder.” Moreover, since it is “not [the courts’] function to resolve for corporations questions of policy and business management,” they must carefully pinpoint the breaking of law or corruption. For the rest of the board, gross negligence must be proven. Such a standard requires evidence of “reckless indifference to or a deliberate disregard of the whole body of stockholders or actions which are without the bounds of reason.”
Courtroom Work Group Roles
1466 Words | 6 PagesEvaluating the Roles of the Courtroom Work Group Ebony McQueen University of Phoenix Introduction to Criminal Justice, 201 Christle Sheppard Southall July 5, 2015 Running head: Group 2 Evaluating the Roles of the Courtroom Work Group Abstract The Courtroom Work Group plays a very important and integral part to make up such a dynamic team. Each participant role relies upon the strength of the other members. The entire team shares the responsibilities of keeping the work flow smooth without any barriers.
Whistleblower Protection Essay
2272 Words | 10 PagesAbstract Whistleblowing has now became an important aspect to organizations and it reflects governance aspect of the organization. This paper explains problems faced by Whistleblowers over the world. This paper also deals with the legislations on whistleblower protection in India and why some countries are hesitating to introduce whistleblower protection law. It deals with reasons for such hesitations.
Image Restoration Theory Analysis
1028 Words | 5 PagesBenoit defines image restoration theory as strategies used to mitigate image damage following a threat to a reputation (organizational or personal) (Blosenhauer, 2014). As we know that, image is possible a very important concern nowadays. Thus, when reputation is threatened especially during crisis happens, individuals and organizations are encouraged to justify themselves to the attack. Organization works on effort to ensure that crises are anticipated, managed, and evaluated effectively and efficiency before any unfavorable impression is formed.
Aaron Salomon Case Study
1852 Words | 8 PagesAaron Salomon was successful leather merchant that specializes in the manufacture of leather shoes, for many years ran his job as a trader and sole. At the time, it was a legal requirement for inclusion at least seven people participate as members, partners of the company. Mr. Salomon, CEO himself. Mr. Solomon owned 20,001 of the 20,007 shares of the company - with the participation of the remaining six individually among six shareholders (wife, daughter and four sons).
More about Essay On Piercing The Corporate Veil
Court Case Of John And Timothy Rigas
771 Words | 4 PagesLindner Fund V. Abney Case
251 Words | 2 PagesIn Wells Fargo Scandal, The Buck Stopped Well Short Summary
498 Words | 2 PagesDbq Essay On Companies Are Changing The World
736 Words | 3 PagesEnron Analysis Essay
887 Words | 4 PagesPinto Fire Case Summary
1096 Words | 5 PagesIncome Smoothing Case Study
1491 Words | 6 PagesBears Are Us Organizational Structure
490 Words | 2 PagesCompare And Contrast Vermont And The State Of Texas
791 Words | 4 PagesOnion Rhetorical Analysis Essay
503 Words | 3 PagesEssay On Fiduciary Duty
1765 Words | 8 PagesCourtroom Work Group Roles
1466 Words | 6 PagesWhistleblower Protection Essay
2272 Words | 10 PagesImage Restoration Theory Analysis
1028 Words | 5 PagesAaron Salomon Case Study
1852 Words | 8 Pages