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California: Shareholder Liability Under the "Alter-Ego" Doctrine

12-17-2015


Ordinarily,
shareholders are not personally responsible for corporate liabilities. However,
if a corporation has been operated as
the “alter ego” of its shareholders, the corporation’s creditors-including torts claimants- may be permitted to “pierce
the corporate veil” and enforce their claims directly against the shareholders.
(Similarly, an action may lie on an “alter ego” theory against the corporate
parent of a wrongdoing subsidiary.) Two requirements must be established prior
to considering whether the “alter-ego” liability may be appropriate.

 

Unity of interest: It must appear that the corporation was influenced
and governed by the persons sought to be held liable for its conduct; and there must be such “u...


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