3 ms·

Could you elaborate on point 1?

• joeag 16y ago
  If a corporate entity is created and funded with very little in the way of assets it can be disregarded in a legal proceeding. This is called "piercing the corporate veil". There are other factors a judge or jury will weigh as well, but assets are among the most important. This is pretty common sense if you think about it - although most people (especially those who read the "incorporate for $99 and protect yourself from creditors) don't realize it.. just because you sign some papers and create a legal entity the law isn't going to allow you to stiff people and evade legal obligations.
  • Muzza 16y ago
    I am aware of the corporate veil and the piercing thereof, but I'm not really convinced that assets are among the most important things a jury would like at. And surely it varies among industries (so a real estate investment firm would require more in assets than an internet startup in order to be considered "proper").
    • joeag 16y ago
      Actually, having assets appropriate to the business type is one of the key factors in determining whether the corporate entity will be respected and you are correct that it differs for a RE company and an internet startup. There are plenty of citations to case law to support this but I am too lazy to go find them to post in this reply.