Talk:Piercing the corporate veil/Archives/2011

Better introductory example required

A simple example would be where a businessman has left his job as a director and has signed a contract to not compete with the company he has just left for a period of time. If he set up a company which competed with his former company, technically it would be the company and not the person competing. But it is likely a court would say that the new company was just a "sham", a "fraud" or some other phrase,[1] and would still allow the old company to sue the man for breach of contract. A court would look beyond the "legal fiction" to the reality of the situation.

I'm not an expert but this seems to be a bad example to me. The director has breached contract personally and it is stated that a court would allow to 'sue the _man_'. A better example would have a claim against the company itself based on an action taken by the company and where one or more persons that assemble the company would be held personally responsible for this action. 82.95.200.104 (talk) 09:42, 29 November 2009 (UTC)

I concur with the opinions above. Even in Wikipedia itself, the classic example is provided - which is also the most common use of the term - piercing the corporate shell games - See Benjamin N. Cardozo and Berkey v. Third Avenue Railway Co, not relative to liability of shareholders, but relative to liability of parent corporation pertaining to conduct of a wholly owned subsidiary. Therefore, in particular, the citing of the Cardozo decision in instant article is misleading as well, providing the exception, not the general rule that he established.

Worldwide view/limited geographic scope

This article concentrates heavily on UK and Australian law without really getting into the laws of the USA, Canada, or other countries. I am putting the "globalize" template on here. --Eastlaw 09:32, 6 November 2006 (UTC)

Changed article on motives for piercing corporate veil

This doesn't explain why people wouldn't want to piece the corporate veil.

However, for corporations with fewer than 10 shareholders, courts of law have found that individuals could escape liability for their own misconduct by holding assets in the name of the corporation. Unlike a large corporation where no individual shareholder could possibly obtain management authority over the corporation, closely held corporations are potentially expressions of the will of a few shareholders. Historically, corporations with 10 or more shareholders are not likely to be affected by piercing.

Roadrunner 23:43, 30 September 2007 (UTC)

Also removed

Similarly, officers and directors of corporations, like other employees, are generally not held liable for the losses of the corporation, unless the liability in question relates directly to the scope of the officer's or director's responsibilities. In a similar manner, people would be less willing to serve as an officer or director if they were liable for the entire amount of the corporation's losses (though not necessarily for a fractional amount).

This isn't relevant to piercing the corporate veil. When you pierce the corporate veil, you are going after shareholders and not employees or directors.

Roadrunner 23:55, 30 September 2007 (UTC)

Incorrect. Piercing the corporate veil goes after the directing mind of the corporation, be it a shareholder or director. G. Csikos, 16 February 2008 —Preceding unsigned comment added by 216.239.81.125 (talk) 06:25, 16 February 2008 (UTC)

The "Fraud" Exception

This is an exception to the rule in Salomon yet reads as an exception to the concept of piercing the veil. Whilst the case law indicates it is not strictly an instance of piercing the veil it remains an instance of the courts setting aside the veil to find members liable. 'other rules of law' is similarly vague considering the mention of equity in the previous sentence. 14/01/2007

Two Questions for Expanding the Article

How about a paragraph explaining how to prevent piercing the corporate veil of a sole proprietorship LLC where the owner is sued for say a car accident and the plaintiff is trying to tap into the assets of the LLC claiming they are not separate entities? And, (2): How can a sole-proprietor owner tap into the assets of the LLC and not have the veil pierced? —Preceding unsigned comment added by Raquel Baranow (talk • contribs) 19:52, 14 March 2006

This appears to be Resolved

In the 3rd paragraph of the section discsusing the "single economic unit" there is a sentence fragment. A sentence ends "were merely circumstances where." I do not know what is supposed to follow, nor am I inclined to figure out what ought to be there. But the error remains, and someone should fix it.Kthejoker 15:01, 26 September 2006 (UTC)

How do I cite this?

There is something I want to add to this article, but I don't know how to cite it. See, it's not original research; I learned this piece of information while in college as a business major, and the class I learned it in didn't even have a mandatory textbook (I just listened to lectures). This is a very reputable college that, from what I've heard, is the third best Business school in the nation (specifically, it's the University of Arkansas' Walton College of Business, so it is, indeed, reliable. How would I cite that? —Preceding unsigned comment added by Wikieditor1988 (talk • contribs) 02:06, 28 June 2009 (UTC)

Piercing the veil on a different LLC

Is it possible to pierce the veil on a different LLC without a notice? —Preceding unsigned comment added by 69.142.152.12 (talk) 04:37, 4 November 2009 (UTC)