As a business owner, you understand the importance of protecting your assets and managing your debt. However, when companies go out of business, change names or dissolve, it can be difficult to collect on outstanding debts. The question is, do corporate debts disappear when these events occur? The answer is maybe not.
At our law firm, we have been handling corporate and business to business debt collection matters for clients throughout Florida since 1996. We understand the challenges that businesses face when trying to collect on outstanding debts, and we have the experience and expertise to help you navigate this process.
One legal remedy that may be available to you is called “piercing the corporate veil.” This process allows creditors to collect on outstanding debts from a shareholder or principal It is based on imposing liability on the owner(s) of the company themselves, upon showing proof that the company is a ‘mere instrumentality’ (alter ego) of the shareholder and that it was formed or used by the shareholders for a fraudulent or misleading purpose.
To be able to pierce the corporate veil, it is necessary to show an almost indistinguishable relationship between the corporation or limited liability company and a shareholder or principal, unfair or inequitable conduct and that damage resulted. This may involve proving that the improper conduct was actually fraudulent, the corporation failed to follow corporate formalities, commingling of funds and a host of other criteria. .
In order to pierce the corporate veil, it’s important to have experienced attorneys who understand the complexities of corporate debt collection and can help you navigate the legal process. Our firm has the knowledge and expertise to help you understand your legal options and take the necessary steps to collect on your outstanding debts.
In conclusion, Piercing the corporate veil is a legal remedy that can help you collect on outstanding corporate debts from shareholders or owners Contact us today to learn more about how we can help you navigate this process and maximize your recovery.