BUS-L 201 Chapter Notes - Chapter 10: Fiduciary, Money Supply, Estoppel
Document Summary
Requirements to pierce the veil (2) - 1. domination of a corp by its shareholders: domination is for improper purpose. Improper purposes for a shareholder to dominate a corporation - 1. defrauding creditors: circumventing a statute, evading an existing obligation. Thin capitalization - capitalization is very small in relation to the nature of a business. Looting - transferring corp assets to shareholders for less than fair market value. Attempting to escape a liability maybe be reincorporating or forming a subsidiary corp. Advantages of partnerships - no formalities, tax-profit flows to partners, all control. As partnerships unless money supply is so large that you"re at the highest tax rate. Nondelegable obligations and examples - things an agent can"t do--make statements under oath, vote in elections, sign wills, service contracts with lawyers or doctors, etc. Nonemployee agents - usually contract with the principal to produce a result and determine for themselves how it will be accomplished.
