In deciding whether a plaintiff has met the burden to pierce the corporate veil, the court considers whether the plaintiff has presented evidence showing: (1) undercapitalization, (2) absence of corporate records, (3) fraudulent representation by corporate shareholders or directors, (4) use of the corporation to …
Considering this, who can pierce the corporate veil?
In general, creditors have no recourse against corporate shareholders, as long as formalities are satisfied. When, however, the corporation is fraudulently created to escape liability, then creditors may pierce the corporate veil.
In this way, under what circumstances can the corporate veil be lifted?
FRAUD OR IMPROPER CONDUCT– the most common ground when the courts lift the corporate veil is when the members of the company are indulged in fraudulent acts. The intention behind it is to find the real interests of the members. In such cases, the members cannot use Salomon principle to escape from the liability.
