Avoiding,your,Corporate,Veil,P law Avoiding your Corporate Veil to be Pierced
Bankruptcy is a situation, wherein an individual is termed as unable to discharge all the debts. When a person or a company is not able to pay off its creditors, it has an obligation to file a bankruptcy suit. In fact, a bankruptcy suit is a When you work with an attorney, you will have no problem reducing the risks associated with getting your case in front of a judge and jury, or other formal court, when you need to. However, every case is different. It is important to work wi
And have yourshareholders shouldering the liability for debts and other obligations. If you are a businessperson, it is very important to have asolid corporate structure in order that your business' shareholders assets areprotected well enough from the corporations' debts and other liabilities. Thissituation is possible if your corporation is being treated as a different orseparate entity from its owners. It should also observe the formalities ofcorporate ethics as required by the laws governing it. A distinction must be solidly set between the owners orshareholders of the business and the corporation, otherwise a creditor inpursuit of the payments for debts and obligations may be able to ignore thewhole entity of the corporation and rather go after the assets of individualshareholders. If your corporation start facing this kind of pursuit fromcreditors, then it can be considered that, your corporate veil has beendisregarded or pierced. Upon the occurrence of this, your shareholders becomepersonally liable for the debts and other obligations being sought bycreditors. Consequently, the law will then impose the liability againstthe corporation's shareholders instead of the corporation itself since theirentities were not established separately. The personal liability that isimposed against the shareholders would have a likely undesirable result ontheir personalities, though. In order for your business to avoid this inconvenience andthe undesirable outcome from it, here are the following things to keep in mind,according to the general principles of the corporate laws: Preserve your company's corporate records in strictly professional manner. If you are incorporated in California, then make sure that the way your significant corporate records are kept in compliance with the state of California Corporation's Code. If you fail to comply strictly withthese codes, chances are if your case goes to trial, the courts may be given amajor reason to consider whether your corporate veil could be pierced. According to the laws, it iscompulsory for the corporation to hold regular annual meetings of itsshareholders and regular annual meetings of its Board of Directors. Thesemeetings may become actual meetings wherein the quorum required is met, theycan also be held based "on paper", or the "Unanimous WrittenConsent in Lieu of Meeting" is drafted and enforced on all persons whoshould be present for that particular meeting. Moreover, any kind of extraordinarytransactions need to be clearly documented through a shareholders or directors'"Special Meeting." In every time these meetings have taken place, thewritten consents or minutes of the proceedings need to be transcribed on itsappropriate place in your company's corporate book. It should be continuouslymaintained as long as the corporation exists. Shareholders of the corporation must invest sufficient amounts of capital depending on the nature of the business. They must not just lend the company with their money. If ever a court finds out that thecompany has no sufficient capital to operate, it may permit the creditor tolook into the company and hold its owners liable for the debts and obligationsmade by the company. Remember, the courts have longestablished that companies with inadequate capitalization fund may beconsidered as "shams." Maintain your corporation's identity separate from you and other owners or shareholders. Do not use the assets of your corporation, as they are the same assets as yours or execute documents indicating yourself as a corporation officer. Avoid placing the income of the corporation into its account. Do not mingle the shareholders' assets with that of the corporation's assets. Always use the company's full name including the "Inc." File the corporation's tax returns as required by the Federal and state governments. Your corporate attorney can help you also in completing the Secretary of State's form that need to be filled up with information then mailed in, called the "Statement of Information." Corporate trial lawyers http://www.mesrianilaw.com/Business-Trial-Lawyers.htmlare your dependable advocates once your corporation becomesinvolved in a decisive business corporate trial before a court of law.
Avoiding,your,Corporate,Veil,P