Can anyone give me information about"Piercing the Corporate Veil?"?

Question

I work for a company where the minority owner has an ATM card. He goes to the bank and takes money as he wants. He has outstanding bills that the company owes in excess of 250.k and he withdraws out of the bank about 11K per month for his expenses. Is the Majority owner going to be held liable for this?

Answer 1

"Piercing the Corporate Veil" means that a creditor of a corporation is attempting to recover not from the corporation but from the owners themselves.

It usually requires that the owners have engaged in deliberate wrongdoing to shield assets of the corporation from a creditor.

And yes, if the veil is successfully pierced, both owners can be liable for the corporations debts. The majority owner in your example 'might' though be able to sue the minority owner if he was going behind his back. Not keeping an eye on your own companies bank withdrawals though, is so negligent that a court might say "It's your own fault"

Richard