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Piercing the Corporate Veil Checklist - Avoid Mistakes and Exposure

Avoid piercing the corporate veil with these tests and due diligence checklists.

Formation of a corporation or LLC through which to conduct business is necessary to avoid personal liability. Formation of a corporation or LLC alone does not, however, guarantee protection from personal liability to contract creditors or tort victims or, in the case of entity ownership, from parent company liability. If corporate formalities and corporate independence are not observed, and the corporation through its owner(s) engages in wrongful behavior which causes damage, a court may 'Pierce the Corporate Veil' and find the individual owner or parent company liable regardless of the existence of the corporation or LLC. While states have different tests and considerations for Piercing the Corporate Veil, there are common factors applicable nationwide that increase Veil Piercing risk. This topic will help lawyers and business persons identify and understand the multiple factors that can result in Veil Piercing, apply a common sense approach to avoid those behaviors, and reduce the chances of owner individual and parent liability.


Runtime: 86 minutes
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Why Lorman?

Over 30 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

What Is Piercing the Corporate Veil and Why Does It Happen?

  • Definition
  • Distinction Between Veil Piercing and Other Forms of Individual Liability
  • Public Policy Justifications for Veil Piercing
  • Who Seeks Veil Piercing and Why
  • Individual Shareholder Versus Parent Liability

What Are the Most Common Components of Veil Piercing Tests?

  • Alter Ego (Individual Shareholder, Director, or Dominating Individual)
  • Mere Instrumentality (Parent/Subsidiary)
  • Wrongful Acts Perpetrated Through Corporation Which Cause Damage and Together Make Limited Liability Inappropriate or Inequitable Under the Circumstances

Checklist of What Owners and Parent Companies Can Do to Avoid Veil Piercing

  • Corporate Formation Checklist
  • Maintenance of Corporate Form After Formation Checklist
  • Board of Directors Behavior Checklist
  • Shareholder Behavior Checklist
  • Parent Subsidiary Behavior Checklist
  • Avoid Comingling of Corporate and Personal Funds and Payments Checklist
  • Avoid Wrongful Conduct Towards Creditors or Tort Victims Checklist
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Why Lorman?

Over 30 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Webinar

No credit available.

Audio & Reference Manual

  • Arizona CLE 1.5
     
  • CA MCLE 1.5
     
  • CT CLE 1.5
     
  • GA CLE 1.5
     
  • HI CLE 1.5
     
  • IL CLE 1.5
     
  • ME CLE 1.5
     
  • MT CLE 1.5
     
  • NJ CLE 1.8
     
  • NV CLE 1.5
     
  • NY CLE 1.5 including Areas of Professional Practice 1.5
     
  • VT CLE 1.5
     
  • WA CLE 1.5
     
  • WV MCLE 1.8
     
The CLE Code is ONLY a requirement when applying for CLE Credit in California (for participatory credit), Kansas, New Jersey or New York. Other states do not need to supply the CLE Code to apply for CLE credit.

MP3 Download

  • Arizona CLE 1.5
     
  • CA MCLE 1.5
     
  • CT CLE 1.5
     
  • HI CLE 1.5
     
  • IL CLE 1.5
     
  • ME CLE 1.5
     
  • MT CLE 1.5
     
  • NJ CLE 1.8
     
  • NV CLE 1.5
     
  • NY CLE 1.5 including Areas of Professional Practice 1.5
     
  • VT CLE 1.5
     
  • WA CLE 1.5
     
  • WV MCLE 1.8
     
The CLE Code is ONLY a requirement when applying for CLE Credit in California (for participatory credit), Kansas, New Jersey or New York. Other states do not need to supply the CLE Code to apply for CLE credit.
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More Program Information

Why Lorman?

Over 30 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Christopher C. Mason

Christopher C. Mason

Smyth & Mason, PLLC

  • Partner in the AV rated Seattle law firm of Smyth & Mason, PLLC
  • Committed to providing practical legal advice that can be effectively implemented
  • Has litigated and practiced in the area of commercial, employment and tort law throughout his 34-year career
  • Routinely forms and advises corporations and LLCs and their owners on compliance with applicable laws and defends entities and their owners against claims by creditors and tort victims
  • Prosecutes tort and contract claims against corporations where veil piercing is sometimes sought
  • Represents businesses large and small, the vast majority of which are nonpublic entities
  • Member of the federal and state bars of the state of Washington
  • J.D. degree, Arizona State University School of Law; B.A. degree, cum laude, Bowdoin College
  • Can be contacted at 206-621-7100, cmason@smythlaw.com or through his firmís website at www.smythlaw.com
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Product ID: 397308
Published 2016, 2017
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