Piercing Corp Veil

Question 1

SH Liab

Answer 1

• Sh not generally personally liab for obligations the corp incurs
• exceptions to this

Question 2

PCV

Answer 2

-CL doctrine that allows 3P tort or K claimants to pierce the corp’s protective veil and hold offending SH(s) personally liable for the K or tort claims that the corp incurs

Question 3

PCV Factors

Answer 3

1) undercapitalization= did SH put enough $ in corp when forming it ($1k required by law)?
2) disregard of corp formalities
3) commingling of corp assets with personal assets
4) self-dealing= transactions should be arms lenght
5) fund siphoning- SH draw $ out of corp that should go to pay pre-existing obligatins
6) use of corp form to avoid legal obligation
7) SH’s control/dominion over corp
8) wrongful, fraud, or misleading dealings with corp creditor

Question 4

Tort Claimants

Answer 4

-argue more for PVC here because they did not voluntarily get involved with corp via k

Question 5

Which SH liable

Answer 5

• those who actively participated in conduct that incurred the obligation
• passive investors who acted in GF will not be vulnerable to a PVC case
• liab is J&S for those who actively participated in the offending conduct