The document discusses three types of cases where a court may disregard the separate legal status of a corporation:
1. Defeat public convenience cases - Where the corporate fiction is used to evade an existing obligation. Clear and convincing evidence is required.
2. Fraud cases - The corporate entity must be purposely used as a shield to defraud creditors or perpetrate wrong.
3. Alter Ego cases - A three-pronged test is used to determine if one party controls the corporation to such a degree that they have no separate existence and this control was used to commit fraud or wrongdoing that caused harm.
The document discusses three types of cases where a court may disregard the separate legal status of a corporation:
1. Defeat public convenience cases - Where the corporate fiction is used to evade an existing obligation. Clear and convincing evidence is required.
2. Fraud cases - The corporate entity must be purposely used as a shield to defraud creditors or perpetrate wrong.
3. Alter Ego cases - A three-pronged test is used to determine if one party controls the corporation to such a degree that they have no separate existence and this control was used to commit fraud or wrongdoing that caused harm.
The document discusses three types of cases where a court may disregard the separate legal status of a corporation:
1. Defeat public convenience cases - Where the corporate fiction is used to evade an existing obligation. Clear and convincing evidence is required.
2. Fraud cases - The corporate entity must be purposely used as a shield to defraud creditors or perpetrate wrong.
3. Alter Ego cases - A three-pronged test is used to determine if one party controls the corporation to such a degree that they have no separate existence and this control was used to commit fraud or wrongdoing that caused harm.
Defeat public convenience Fraud cases Alter Ego cases
Evidence Clear and convincing evidence.
needed Test employed When the corporate fiction is Veil-piercing in fraud cases requires that theThree-pronged test: to determine used as a vehicle for the evasion legal fiction of separate juridical personality is a. Instrumentality or Control test - existence of an existing obligation. used for fraudulent or wrongful ends. control, not mere majority or complete stock control, but complete There must be a showing that the corporate domination, not only of finances but entity was purposely used as a shield to of policy and business practice in defraud creditors and third persons of their respect to the transaction attacked rights, or perpetrate wrong, is not enough so that the corporate entity as to this justification for disregarding their separate transaction had at the time no personalities. separate mind, will or existence of its own b. Fraud test - such control must have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff’s legal right; and c. Harm test - the aforesaid control and breach of duty must [have] proximately caused the injury or unjust loss complained of.