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MIAMILAW1127, Attorney
Category: Business Law
Satisfied Customers: 755
Experience:  Founding Partner at Moises Law, P.A.
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What is the process to "pierce the corporate

Customer Question

What is the process to "pierce the corporate viel"? A civil suit was filed against my business's LLC, and against myself personally as well. This is an injury lawsuit. There is no mis-use of the LLC, or funds, etc. and I had zero wrongdoing in the case
personally (neither did the business). The LLC has since been dissolved (when the business closed), which only leaves me personally on the lawsuit. My attorney feels that I should just pay them a small settlement personally so they will go away. I thought
there was a legal process to pierce the veil? Should I even still be on this suit? I thought that a motion to dismiss me personally would have been the correct route to take?
Submitted: 1 year ago.
Category: Business Law
Expert:  MIAMILAW1127 replied 1 year ago.

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.

Customer: replied 1 year ago.
I cannot view the response?
Expert:  MIAMILAW1127 replied 1 year ago.

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.

Expert:  MIAMILAW1127 replied 1 year ago.

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.

Customer: replied 1 year ago.
I know all of the above. I need to know if they somehow violated a law or if what they did was legit. Does a judge have to grant them permission to name me? Should i just not show up in court because the lawsuit isn't valid? What is the process to pierce it?
Expert:  MIAMILAW1127 replied 1 year ago.

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.

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