Atlanta Debt Collection Attorney Richard Howe discusses what it means to pierce the corporate veil.
When a corporation incurs a debt there is no personal liability, in other words that’s the idea of the corporate shield. The corporate shield says that if your corporation and you incur debts then the officers and shareholders are not personally liable for the debt.
In our office whenever we have a a debt collection matter we never really stop at the point where a debtor says we’re insolvent or we’re defunct. As an experienced debt collection law firm, we always dive deeper to bring them in for depositions and force them to reveal whatever assets they have and then at that time we determine whether or not we can proceed with an action to pierce the corporate veil. Georgia has a very strong pierce the corporate veil statute and allows you to pierce the corporate veil and go after the shareholders or officers individually and go after their individual assets if they did not do a lot of things correctly. Items we look at include such things as whether they funded the corporation properly or if they commingled funds. Insolvency & Co mingling are two of the most common reasons and weapons to be able to pierce the corporate veil and hold a shareholder liable.
If you are a business trying to collect a business debt, contact our firm for a free consultation, where we can advise you on how best to collect the bad debt.
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