Legal doctrine whereby the court finds a corporation lacks a separate identity from an individual or corporate shareholder, resulting in injustice to the corporation’s debtors. Finding alter ego gives the court cause to pierce the corporate veil and hold individual shareholders personally liable for debts of the corporation.
See, e.g. Fletcher v. Atex, Inc., 68 F.3d 1451 (1995) and United States v. Bestfoods, 524 US 51 (1998).
Definition from Nolo’s Plain-English Law Dictionary
A corporation, limited liability company, or other entity set up to provide a legal shield for the person controlling the operation. Proving that such an organization is a mere cover, or alter ego, for the business owner is one way to "pierce the veil" of the corporation or limited liability company, or take away the owners' limited liability protection.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:11 pm