Why Do You Need A Business Lawyer
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Having a business lawyer provides important legal guidance and protection. A lawyer can help reduce damages from lawsuits, properly deal with employee issues according to employment laws, and ensure correct business structuring and compliance with regulations for incorporation and liquidation. They can also review contracts to prevent business-harming agreements from being signed.
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Receivership and liquidation Accounts Prof. Oyedokun.pptx
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"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
Fraud or Illegality: If shareholders or members use the corporate structure to perpetrate fraud, evade legal obligations, or engage in illegal activities, courts may disregard the corporate entity and hold those individuals personally liable.
Undercapitalization: If a corporation is formed with insufficient capital to conduct its intended business and meet its foreseeable liabilities, and this lack of capitalization results in harm to creditors or other parties, courts may lift the corporate veil to hold shareholders or members liable.
Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
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- 1. Why Do You Need A Business Lawyer? Having a good business lawyer to represent you can add incredible value and protect you against legal implications, lawsuits and similar liabilities. www.kingfirm.org 330 N. Main Street, Kaysville, UT 84037 Phone: (801) 543 - 2288 Image Source: Designed by Freepik Helps In Mitigating Damages A business lawyer can signi cantly help to reduce or even mitigate the damages when a lawsuit arises. Dealing With Employee Issues A good lawyer is familiar with all the laws related to employment and can assist you in employee associated issues. Assists In Business Structuring An experienced lawyer provides proper guidance at every step to ensure that you take the right decision for your business. Incorporation/ Liquidation Right from the incorporation of the company to its liquidation, a business attorney helps you in complying with laws of the land. Signing A Contract Businesses handle several contracts simultaneously. Having a business lawyer by your side can prevent you from signing a contract that may jeopardize your business.