Replies to post #82492 on Inca Designs, Inc. (fka IDGI)

[xlr-v]

I ran across this today in my reserch.
What you need to do is try to "pierce the corporate veil" and go after the owner's assets directly. This is a tough thing to do, however.

Generally, the plaintiff has to prove that the incorporation was merely a formality and that the corporation neglected corporate formalities and protocols, such as voting to approve major corporate actions in the context of a duly authorized corporate meeting. This is quite often the case when a corporation facing legal liability transfers its assets and business to another corporation with the same management and shareholders. It also happens with single person corporations that are managed in a haphazard manner. As such, the veil can be pierced in both civil cases and where regulatory proceedings are taken against a shell corporation.

The facts the court will consider are:

* Absence or inaccuracy of corporate records; * Concealment or misrepresentation of members;
* Failure to maintain arm's length relationships with related entities;
* Failure to observe corporate formalities in terms of behavior and documentation;
* Failure to pay dividends;
* Intermingling of assets of the corporation and of the shareholder;
* Manipulation of assets or liabilities to concentrate the assets or liabilities;
* Non-functioning corporate officers and/or directors; * Other factors the court finds relevant;
* Significant undercapitalization of the business entity (capitalization requirements vary based on industry, location, and specific company circumstances);
* Siphoning of corporate funds by the dominant shareholder(s);
* Treatment by an individual of the assets of corporation as his/her own; * Was the corporation being used as a "façade" for dominant shareholder(s) personal dealings; Alter Ego Theory;

It is important to note that not all of these factors need to be met in order for the court to pierce the corporate veil. Further, some courts might find that one factor is so compelling in a particular case that it will find the shareholders personally liable.

My recommendation is that if the amount of money owed you is substantial, and you have the time and resources to do so, engage an attorney and see if any of the conditions that would allow you to go after the owner's personal assets exist.
Even if they "did nothing wrong" there appears to be reason enough for a lawsuite.IMO