Beyond the Form- Should the Corporate Veil be Pierced?

The doctrine of "piercing the corporate veil" is a frequently used but not necessarily well understood concept. Courts and commentators have struggled for many years to develop principles that, when applied, would reveal whether a separately existing corporate organization should be disregarded. Most, if not all, of these “piercing" tests involve the evaluation of a variety of factors that suggest whether the injured party may look beyond the corporate form for relief. Control and domination, improper purpose or use, and resulting damage often serve as the three prongs of the piercing theory.

This article first reviews some of the more recent cases in which courts have applied their piercing tests. It then discusses the role of expert testimony in cases wherein the corporate veil is sought to be pierced. Finally, the article presents an analysis of the apparent conflict among the jurisdictions regarding the proper function of the judge and jury in piercing case.

This article was written by Attorney Mark Olthoff and originally published in the UMKC Law Review (Vol. 64, p. 311 - 336, Winter 1995). Mark can be reached at molthoff@stklaw.com.

Author: R. Lawrence (Larry) Ward
Firm: Shughart Thomson & Kilroy, P.C.

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