Legal Question in Business Law in New Jersey

Re: corporation dissolving

If your corporation has dissolved already, most corporate statutes would have provided for a process by which the liabilities would have to have been paid off. If you did not follow those procedures, the corporations creditors could have a legitimate claim to you or your wife's personal assets (all depending on your and your wife's involvment in the corporation). Even if you did follow those procedures, you may have done something in the process that made you liable to those creditors.

If you have not yet dissolved the corporation, you really should consult a lawyer and make sure that those procedures are followed so that the corporate veil isn't pierced solely because of the dissolution. The corporate veil maybe pierced for a number of other reasons, unrelated to the dissolution.

If you require legal advice, please do not hesitate to call me at (212) 695-6400.

Best of luck.

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WARNING: This information is not intended to constitute legal advice and should not be relied upon for any purpose in lieu of consultation with appropriate legal counsel in your own jurisdiction.

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Re: corporation dissolving

It is very difficult to pierce the corporate veil. Essentially, it means that the shareholders ignored the corporate form and used the assets for personal, rather than corporate, objectives. Sometimes, creditors make this type of threat without having any supporting evidence. To determine whether or not an attack on the corporate veil would be successful, it would be necessary for an attorney to review the circumstances. Our firm is available for this type of review.

Re: corporation dissolving

The question raises several points. Usually a claim to pierce the corporate veil has its basis in the fact that the corporation was improperly capitalized at its inception (not enough money put into it to cover anticipated expenses), or it was technically bankrupt when it was dissolved and someone made a decision on which, if any creditors were to be paid (showed a preference in the payments which is improper) or took money themselves or paid personal bills to the detriment of other creditors. The wife being included in such a claim would depend on many factrs, including her involvement in the corporation, if any; was she a favored creditor; did she receive corporate assets on the dissolution, etc. There are not enough facts to give you more than a general answer. The tax writeoff is not, in itself, the answer to the question. The deduction for taxes may be legitimate, but improper payments could still exist.