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Piercing the corporate veil

Date: 08/13/2007 | Category: Incorporation | Author: developers

From Wikipedia
Factors for Courts to Consider

  • Significant undercapitalization of the business entity (capitalization requirements vary based on industry, location, and specific company circumstances)
  • Failure to observe corporate formalities in terms of behavior and documentation
  • Intermingling of assets of the corporation and of the shareholder
  • Treatment by an individual of the assets of corporation as his/her own
  • Failure to pay dividends
  • Siphoning of corporate funds by the dominant shareholder(s)
  • Non-functioning corporate officers and/or directors
  • Concealment or misrepresentation of members
  • Absence or inaccuracy of corporate records
  • Was the corporation being used as a “façade” for dominant shareholder(s) personal dealings; Alter Ego Theory
  • Failure to maintain arm’s length relationships with related entities
  • Manipulation of assets or liabilities to concentrate the assets or liabilities

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