Important Change to our 30-day Money Back Guarantee ************************************** Due to the increasing allegations of fraudulent purchase transactions involving documents specifically designated for the purposes of litigation in eviction and/or unlawful detainer proceedings, we have been forced into choosing whether to continue offering such documents at all to ANYONE, or to declare that they are NON-REFUNDABLE, and are no longer covered by the 30-day money-back guarantee. ************************************** Consequently we have decided that as of March 16, 2024 at 1:00 am, PDT any single document specifically listed in the Eviction Defense Collection is hereby NON-REFUNDABLE. To determine if one or more of your proposed documents are NON-REFUNDABLE you will need to review the list of single documents found within the description for the Eviction Defense Collection. ************************************** In the meantime, we will be updating the individual file listings for all such affected documents. ************************************** HOWEVER, YOU HAVE BEEN NOTIFIED!

Piercing the corporate veil in California

by Stan Burman

Piercing the corporate veil in California is the topic of this blog post.

Piercing the corporate veil is also known as imposing alter ego liability. This is due to the fact that the procedure is used to "pierce the corporate veil" and allow a plaintiff to add an individual person, or persons, or even another corporation as a defendant and seek to hold them responsible for the debt of the main corporation.

Alter ego allegations are generally used against smaller corporations, particularly corporations with only one or two owners. However, they can also be used against Limited Liability Companies in California pursuant to California Corporations Code Section 17101(b).

I once drafted a complaint with alter ego allegations against an individual who was the managing member of a California Limited Liability Company on the grounds that this particular managing member took the proceeds from a business loan and deposited them into their personal bank account.

There are two main requirements of alter ego liability in California as stated by a California Court of Appeal in a published case.

There must be such unity of interest and ownership that the separate personalities of the corporation and individual no longer exist, and that if the acts are treated as those of the corporation alone, it would sanction a fraud or promote injustice to uphold the corporate entity and allow the shareholders to escape personal liability for the debt. See Associated Vendors Inc. v. Oakland Meat Co. (1962) 210 Cal. App. 2d 825, 836.

Another California Court of Appeal stated in a published case that alter ego liability is premised upon the notion that when a corporation is used by an individual or individuals, or by another corporation, to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful or inequitable purpose, a court may disregard the corporate entity and treat the acts as if they were done by the individuals themselves.

If you are considering filing a complaint and want to pierce the corporate veil you need to make sure that the complaint contains allegations that are sufficient enough to avoid having a demurrer or motion to strike filed against the complaint.

Attorneys or parties in California who would like to view a sample complaint for California that includes alter ego and corporate veil piercing allegations sold by the author can use the link shown below.

Sample Complaint for California With Alter Ego Allegations by Stan Burman on Scribd

 

Attorneys or parties that would like more information on a super document collection containing over 200 sample documents for California and Federal litigation including a sample complaint that includes alter ego or corporate veil piercing allegations sold by the author can use the link shown below.

http://legaldocspro.net/super-litigation-document-package/

The author of this blog post, Stan Burman, is a freelance paralegal who has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents for sale.

*Do you want to use this article on your website, blog or e-zine? You can, as long as you include this blurb with it: “Stan Burman is the author of over 300 sample legal documents for California and Federal litigation and is the author of a free weekly legal newsletter. You can receive 10 free gifts just for subscribing. Just visit freeweeklylegalnewsletter.gr8.com/ for more information.  

Follow the author on Twitter at: https://twitter.com/LegalDocsPro

DISCLAIMER:

Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.

The materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.

 

 

Back to Blog from LegalDocsPro