Cost of E & O insurance

[Ben Palmer]

Great links, thanks Richard.

[lbuttery]

No meetings is rig

Perry:

I understand that you aren't having meetings but that's the point. Without observing business formalities you open yourself to having the courts "piercing the veil".

I found these references with a quick google search:

http://www.mmmlaw.com/publications/a...3&articleid=37

http://www.easybusinesslaw.com/artic...erce_corp_veil

http://www.weissandassoc.com/article...liability.html

Other than the occurrence of fraud, courts normally consider three criteria in determining whether to pierce the corporate veil:

inadequate capitalization,
failure to adhere to corporate formalities, and
abuse of the corporate entity so as to amount to complete dominance by the shareholders.

Fox, 62 Geo. Wash. L. Rev. 1154. Most courts rely on some combination of factors in deciding whether to pierce the veil or maintain shareholder limited liability. Id. It is likely all three will be applied, in varying degrees to LLCs and LLPs.


Disregard as Separate Entity. The last factor of the corporate piercing doctrine that may be applied to LLCs and LLPs is whether the entity is operated as a separate entity or if it is the alter ego of its owner(s). This encompasses such things as maintaining separate bank accounts, keeping separate personal and business funds, keeping separate books, etc. If the entity’s separate identity is not respected through commingling of assets or the like, the risk of piercing of the veil is increased. Note that after the "Check-the-Box" regulations and the proliferation of "disregarded entities" for tax purposes, the risk that appropriate records will not be maintained increases substantially for such entities.



You need to find yourself another lawyer



Lew