Ask a Business Lawyer. Get Business Law Questions Answered ASAP.
Hello. I will be assisting you with your question today.
Please note: This is general information and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.
There is a presumption that a corporation is a distinct legal entity, wholly separate and apart from its shareholders, officers, directors, or affiliated corporations. In an appropriate case and in furtherance of the ends of justice, the separate identity of a corporation may be discarded and the individual or individuals owning all its stock and assets will be treated as identical to the corporation. Discarding the fiction of the corporate entity, or piercing the corporate veil, is appropriate when the corporation is liable for a debt but is without funds to pay the debt, and the lack of funds is due to some misconduct on the part of the officers and directors.
As a general rule, members, owners, employees or other agents of a Tennessee limited liability company have no personal liability for the debts or obligations of the company. See Tenn.Code Ann. § 48–217–101(a)(1); Tenn.Code Ann. § 48–249–114(a)(1)(B). Under an equitable remedy known as “piercing the corporate veil,” however, “the separate legal entity of a corporation may be disregarded upon a showing that it is a sham or a dummy or where necessary to accomplish justice.” Despite the inapplicability of the remedy's name, the “corporate veil” of a Tennessee limited liability company may also be pierced, utilizing the same standards.
You need to show up in court because if you do not, they may default you and you can ultimately have a judgment against you.
They are permitted to name you. The judge does not have to give them permission to do so.
The process to pierce the corporate veil is similar to any other cause of action. They simply need to plead the allegations in a count of the complaint and prove the facts. It is in your best interest to have a local attorney defend you and try to have the cause of action dismissed.
The judge has to be neutral, so they judge will not be able to assist you with your defense.