Piercing The Corporative Veil

The corporate veil is considered an instrument generated in the mercantile custom, to protect the corporate heart of a company and to avoid the share marketing in fraud to the truth and to the detriment of other companies. It is a shield against attempts to minimize the intrinsic potential of society, but at the same time it is also a formula that encourages abuse, sometimes leading to situations of collective fraud. This protection or guarantee of the corporation is given both internally and externally and can affect both shareholders and third parties.

A legal person is understood to be a fictitious entity whose legal personality is manifested and exercised through natural persons, whether shareholders, managers or administrators, representing and acting on their behalf. However, a legal person has a legal personality other than that of its shareholders or directors.

As a result, moral persons are sometimes used as a shield to evade the liability of shareholders and even to carry out collective frauds against third parties; Therefore, the lifting of the corporate veil AIMS TO ATTRIBUTE RESPONSIBILITY FOR FRAUDULENT ACTS COMMITTED BY SHAREHOLDERS.

In this sense, for a judge to consider that the corporate veil must be lifted, a series of requirements laid down in legal doctrine must be reliably accredited, provided that they are intended to prove that the legal person is used to defraud creditors or to evade existing obligations that injure or cause injury to the State or individuals.

Therefore, if you want to know more about the indispensable requirements to lift the corporate veil of a potentially fraudulent moral person, do not hesitate to contact the lawyers of Bandala | Díaz | García in order to provide you with our legal services.