REVERSE PIERCING OF THE CORPORATE VEIL: A STRAIGHTFORWARD PATH TO JUSTICE by ProQuest

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									 REVERSE PIERCING OF THE CORPORATE
  VEIL: A STRAIGHTFORWARD PATH TO
                JUSTICE
                             NICHOLAS B. ALLEN†

                                 INTRODUCTION
     It is textbook law that a stockholder’s exercise of control over
a corporation does not create liability beyond the assets of that
corporation.1 This concept of limited liability for corporations is
“deeply ingrained” in both American legal and economic
systems.2 Indeed, judicial acknowledgement of a corporation as a
separate and distinct entity is a cornerstone of American
enterprise, and benefits such as encouraging shareholder
investment by limiting investor risk exposure are essential.3
     However, limited liability has its limits. When a corporation
is used as a shield for liability or for an illegitimate business
purpose, courts will exercise their equitable power in applying
the “equally fundamental principle” of piercing the corporate
veil.4 Piercing the corporate veil allows one to puncture the “veil”
of limited liability in order to hold a shareholder liable for the
corporation’s conduct.5

								
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