Discussion: Piercing the Corporate Veil

Part 1
In Chapters Seventeen and Eighteen we covered business structures that are separate legal entities in the eyes and mind of the law. Among other benefits of these business organizations is the element of limited liability. There is an exception to this structural advantage – piercing the corporate veil – which removes the shield of protection of the owner’s personal assets. This concept is discussed in both chapters assigned this week as it applies to both the LLC and corporations.

This week’s discussion focuses on the activities of Alianza, LLC or more particularly its primary owner. (Business Case Problem 18-5 at the end of Chapter 18). Given what the facts present to you, apply your legal reasoning in the IRAC format starting with the issue the Business Case Problem suggests: are there sufficient facts [grounds] to pierce the corporate veil of Alianza, LLC and hold Alianza Dominicana personally liable? For this discussion incorporate in your analysis the Dog House Investments, LLC v. Teal Properties, Inc. case (Case in Point 18.6 of the text).

Rule: what rule(s) do you apply?

Application/Conclusion: legally analyze the rule(s) to the facts to reach your conclusion.

Part 2

For this part of the discussion: Let us imagine Alianza, LLC has three directors wherein you are one of those directors. As you read in this weeks reading assignment directors have rights and duties. The three of you as directors (with the duty and authority to make decisions for Alianza, LLC) need to make a decision of which you strongly disagreed with the other two regarding corporate decisions being made. Hoping to avoid possible exposure of your personal assets as a result of the corporate veil being pierced and/or liability to other shareholders – what could you have done?
1. What is the facts?
2. What is the issue?
3. What is the rules?
4. What is your analysis?
5. What is your conclusiocixn?
6. Answer part 2

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