Alter Ego Theory and Litigation against Small Business Corporations.

Alter Ego Theory and Litigation against Small Business Corporations.

Litigators know ahead of time that some small business corporations easily avoid paying judgments against them by shutting their doors.

If your company is sued, the plaintiff’s lawyers will search for ways to prove that you formed a business entity attempting to protect yourself with an invalid corporation.

A plaintiff’s attorney will certainly look for evidence that your corporation is your alter ego. This means there’s no separation between you and your corporation. It also initiates that your corporation could be deemed a sham by the courts. Once that’s established, the court can pierce the corporate veil and you can be held personally liable for the actions of your corporation. You may also be attached to an already existing judgment against your business.

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