Understanding The Liability Of Officers, Directors And Employees
There are circumstances when officers or directors can be held liable for corporate actions. “Piercing the corporate veil” is when the court holds officers, directors and sometimes even shareholders liable for wrongdoing. Occasionally, a judge will allow plaintiffs to receive compensation from a corporation or its directors for damages. This changes on a case-by-case basis and depends on many factors, but there are some common rules. They include:
- If a business is indistinguishable from its owners, the court will not allow owners to benefit from limited liability.
- If a business fails to follow corporate rules (such as record-keeping), the court may impose liability on the individuals specifically controlling the business.
- If a corporation is formed for fraudulent purposes, the court will allow recourse to the owners.
Knowing when and how to protect yourself is of the utmost importance. Our business litigation attorneys can work through your business plan and help you move toward a solution.
Call Today For More Information
It’s easy to understand why these cases quickly get complicated. It is important to protect yourself and know what exactly you can be held liable for. Whether or not you are facing the court system, discussing your options with an attorney is imperative. Call our Dallas office at local 214-473-5774 or toll free 877-779-6001, or fill out our contact form.