OWNER LIABILITY PROTECTION AND PIERCING THE

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OWNER LIABILITY PROTECTIONAND PIERCING THE VEIL OFTEXAS BUSINESS ENTITIESELIZABETH S. MILLERProfessor of LawBaylor University School of LawState Bar of TexasTEXAS BUSINESS ORGANIZATIONS:CHOICE OF ENTITY AND FORMATIONMay 18, 2007San AntonioCHAPTER 5 2007 Elizabeth S. Miller, All Rights Reserved

Elizabeth S. Miller is a Professor of Law at Baylor University School of Law where she teaches BusinessOrganizations, Business Planning, and related courses. Professor Miller speaks and writes extensively on businessorganizations topics, particularly partnerships and limited liability companies. She frequently appears on continuing legaleducation programs and is co-author of a three-volume treatise on Business Organizations published by Thomson/Westas part of its Texas Practice Series. Professor Miller currently serves as Chair of the Partnerships and UnincorporatedBusiness Organizations Committee of the Business Law Section of the American Bar Association and as Vice Chair ofthe Council of the Business Law Section of the State Bar of Texas. She is the immediate past Chair of the Partnershipand Limited Liability Company Law Committee of the Business Law Section of the State Bar of Texas. Professor Millerhas been involved in the drafting of legislation affecting Texas business organizations for many years and has served inan advisory or membership capacity on the drafting committees for numerous prototype, model, and uniform statutes andagreements relating to unincorporated business organizations. She currently serves on the drafting committee for theOmnibus Business Organizations Code, a joint project of the National Conference of Commissioners on Uniform StateLaws and the American Bar Association. She also serves on the drafting committee that is revising the ABA PrototypeLimited Liability Company Act. Professor Miller is an elected member of the American Law Institute and a Fellow ofthe American Bar Foundation and the Texas Bar Foundation.

Owner Liability Protection andPiercing the Veil of Texas Business EntitiesChapter 5Table of ContentsI.Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1II.Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1A.Limited Liability of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1B.Piercing the Corporate Veil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.Alter Ego Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.The Emergence of “Sham to Perpetrate a Fraud”and the Legislative Response (Statutory ActualFraud Requirement in Cases Arising Out of a Contract) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.De-Emphasis of Corporate Formalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.The Rise of the Single Business Enterprise Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.Reverse Corporate Veil Piercing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5III.Limited Liability Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6A.Limited Liability of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6B.Piercing the LLC Veil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6IV.Limited Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9A.General Partner Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9B.Limited Partner Limited Liability; Statutory Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9C.Risk Associated With Complexity of Corporate or LLC General Partners . . . . . . . . . . . . . . . . . . 10D.Veil Piercing of Limited Partnership or Entity General Partners . . . . . . . . . . . . . . . . . . . . . . . . . . 111.Piercing the Limited Partnership Veil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112.Piercing the Entity General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11V.LLPs and Limited Partnership LLPs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A.General Rule: Full Liability Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B.Exceptions to Tort-Type Liability Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C.Expiration of Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .D.Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E.Insurance or Financial Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F.LLP Case Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .G.Limited Partnership LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i1414141515161618

Owner Liability Protection andPiercing the Veil of Texas Business EntitiesChapter 5the corporation liable would promote injustice.”Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 228 (Tex.1990). The total dealings between the shareholder andthe corporation are relevant in determining whetherthere is an alter ego relationship. Id.; see also Gentry v.Credit Plan Corp. of Houston, 528 S.W.2d 571 (Tex.1975). The supreme court has stated that the evidencemay include “‘the degree to which corporate formalitieshave been followed and corporate and individualproperty have been kept separately, the amount offinancial interest, ownership and control the individualmaintains over the corporation, and whether thecorporation has been used for personal purposes.’”Mancorp, Inc. v. Culpepper, 802 S.W.2d at 228, citingCastleberry v. Branscum, 721 S.W.2d 279, 272 (Tex.1986). The alter ego theory has been affected bylegislative developments described below. In a case inwhich a claimant seeks to impose liability on ashareholder for a corporate obligation arising out of acontract, the claimant must meet the actual fraudstandard described below. Additionally, as discussedbelow, the role of corporate formalities in a veil piercinganalysis is now addressed by statute.I.IntroductionSole proprietors and partners in a traditionalgeneral partnership enjoy no protection from the debtsand liabilities of the business. The various businessentities that provide some type of liability protection1 doso under slightly varying approaches. These variationsare discussed below. The concept of “piercing thecorporate veil” is fairly well-developed; piercing in thecontext of alternative entities is not as well-developed.The law in this regard is also discussed below.II.CorporationsA.Limited Liability of ShareholdersA corporation is well-recognized for itscomplete liability shield. Unless a shareholder, director,or officer is liable on some independent legal basis (e.g.,is personally a tortfeasor or guarantor), such parties haveno liability for corporate debts and obligations. Ofcourse, the courts have allowed plaintiffs in exceptionalcircumstances to "pierce the corporate veil.”B.Piercing the Corporate VeilA short discussion cannot do justice to thedevelopments in the area of corporate veil piercing inTexas over the last 20 years; however, a brief summaryis provided below.2.The Emergence of “Sham to Perpetrate aFraud”and the Legislative Response(Statutory Actual Fraud Requirement inCases Arising Out of a Contract)The Texas Supreme Court articulated whatmany believed was an unprecedented and unduly broadapproach to veil piercing in Castleberry v. Branscum,721 S.W.2d 270 (1986). In that case, the courtrecognized the “sham to perpetrate a fraud” basis forpiercing the corporate veil. This theory was distinctfrom alter ego, explained the court, and was a basis topierce the corporate veil if “recognizing the separatecorporate existence would bring about an inequitableresult.” To prove there has been a sham to perpetrate afraud, the court stated that tort claimants or contractcreditors need only show constructive fraud. The courtdescribed constructive fraud as “the breach of somelegal or equitable duty which, irrespective of moralguilt, the law declares fraudulent because of its tendencyto deceive others, to violate confidence, or to injurepublic interests.”The Texas legislature reacted to the Castleberryopinion by amending the Texas Business CorporationAct (the “TBCA”). As a result, veil piercing is nowaddressed by statute in Texas in such a way that piercingthe corporate veil to impose personal liability for acontractual, or contractually-related, obligation of acorporation is quite difficult. The TBCA provides thata shareholder or affiliate may not be held liable for acontractual obligation of the corporation, or any matter1.Alter Ego TheoryTraditionally, most veil piercing cases werepremised on the alter ego theory. The Texas SupremeCourt has described this basis for piercing the corporateveil as follows: “Under the alter ego theory, courtsdisregard the corporate entity when there exists suchunity between the corporation and individual that thecorporation ceases to be separate and when holding only1The forms of business entity discussed in this paper arethe corporation, limited liability company, limited partnership,and limited liability partnership. The current statutesgoverning such entities in Texas are the Texas BusinessOrganizations Code, the Texas Business Corporation Act, theTexas Limited Liability Company Act, the Texas RevisedLimited Partnership Act, and the Texas Revised PartnershipAct. The Texas Business Organizations Code becameeffective January 1, 2006, and governs business entitiesformed on or after that date. A domestic entity formed beforeJanuary 1, 2006 will continue to be governed by the pre-Codestatutes governing that type of entity until January 1, 2010,unless the entity voluntarily elects to adopt the BusinessOrganizations Code prior to 2010. Effective January 1, 2010,the current business entity statutes will expire, and theBusiness Organizations Code will govern all domestic entities.1

Owner Liability Protection andPiercing the Veil of Texas Business EntitiesChapter 5relating to or arising from the contractual obligation,unless the shareholder or affiliate used the corporation toperpetrate an actual fraud for the direct personal benefitof the shareholder or affiliate. Tex. Bus. Corp. Act art.2.21A(2). This provision has been carried forward in thecorporate provisions of the Business Organizations Code(the “BOC”). Bus. Org. Code § 21.223(a)(2) and (b).A 1998 court of appeals case illustrates thedifficulty plaintiffs may have in meeting these standardsto pierce the veil. In Menetti v. Chavers, 974 S.W.2d168 (Tex.App.–San Antonio 1998, no pet.), the plaintiffssued their builder alleging breach of contract and varioustort and DTPA claims. The court determined that all theclaims arose from or related to the construction contractand required a showing of actual fraud to pierce thecorporate veil. The court acknowledged that theevidence indicated the defendants were poorbookkeepers and took little effort to preserve thecorporate fiction; however, there was no evidence thatthe defendants made any fraudulent misrepresentations(the theory of actual fraud pursued by the plaintiffs).Thus, the plaintiffs were unable to impose liability basedupon the alter ego theory. In addition, the court heldthat, since Article 2.21 requires actual fraud to pierce theveil on the basis of “alter ego, . sham to perpetrate afraud, or other similar theory,” the lack of actual fraudprecluded liability under all of the other theories pleadedby the plaintiffs, including sham to perpetrate a fraud,denuding, trust fund doctrine, and illegal purposes.The Texas Supreme Court recently discussed the“narrowly prescribed.circumstances under which ashareholder can be held liable for corporate debts” underTBCA Article 2.21 and BOC Sections 21.223-21.226.Willis v. Donnelly, 199 S.W.3d 262, 271-73 (Tex. 2006).Donnelly argued that Willis and his wife were personallyliable for the breach of a letter agreement under whichtwo corporations formed by Willis were obligated toissue stock to Donnelly.After describing thecircumstances leading to the amendment of Article 2.21(i.e., the business community’s displeasure with theflexible approach to veil piercing embraced inCastleberry), the court relied upon BOC Sections21.224-21.225 to reject Donnelly’s claim that theWillises were liable for breach of the agreement basedon an implied ratification of the agreement. The courtpointed out that the statute precludes holding ashareholder liable for any contractual obligation of thecorporation on the basis of alter ego, actual orconstructive fraud, sham to perpetrate a fraud, or othersimilar theory unless the shareholder causes thecorporation to be used to perpetrate an actual fraud onthe obligee for the shareholder’s direct personal benefitor the shareholder expressly agrees to be personallyliable for the obligation. The jury rejected Donnelly’sfraud claim, and the court concluded that the Willisesdid not expressly agree to assume personal liabilityunder the contract. According to the court, “[t]o imposeliability against the Willises under a common law theoryof implied ratification because they accepted thebenefits of the letter agreement would contravene thestatutory imperative that, absent actual fraud or anexpress agreement to assume personal liability, ashareholder may not be held liable for contractualobligations of the corporation.” The court held thatDonnelly’s characterization of his theory as“ratification” rather than “alter ego” was simplyasserting another “similar theory” of derivative liabilitythat is covered by the statute.TBCA Article 2.21 and BOC Section 21.223 donot specify that liability based upon alter ego, sham toperpetrate a fraud, or other veil piercing theories must beaccompanied by actual fraud if the underlying claim isbased upon a tort or statutory liability that does not ariseout of a contract of the corporation. See Love v. State,972 S.W.2d 114, 117-18 (Tex.App.–Austin 1998, pet.denied); Farr v. Sun World Savings Ass’n, 810 S.W.2d294, 296 (Tex.App.–El Paso 1991, no writ); WesternHorizontal Drilling, Inc. v. Jonnet Energy Corp., 11F.3d 65, 68 n. 4 (5th Cir. 1994); Nordar Holdings, Inc. v.Western Securities (USA) Ltd., 969 F.Supp. 420, 422and 423 n. 2 (N.D.Tex.1997).Bar committeecommentary, however, characterizes the constructivefraud standard as “questionable” in the context of tortclaims and suggests that the amendments should beconsidered by analogy in the context of tort claims, inparticular contractually based tort claims. Tex. Bus.Corp. Act art. 2.21, Comment of Bar Committee–1996.The statute was amended in 1997 to make clear that thecorporate veil may not be pierced to hold a shareholderor affiliate liable on a claim “relating to or arising from”a contractual obligation of the corporation absent actualfraud on the part of the shareholder or affiliate.While actual fraud may not be required to piercethe corporate veil in the context of a non-contractualobligation, veil piercing has traditionally beenpredicated on notions of justice and fairness. Thus, theplaintiff should nevertheless be required to establish thatinjustice or inequity will result if the separate corporateexistence is recognized. See Matthews Constr. Co., Inc.v. Rosen, 796 S.W.2d 692 (Tex. 1990) (stating that“[w]hen the corporate form is used as an essentiallyunfair device – when it is used as a sham – courts mayact in equity to disregard the usual rules of law in orderto avoid an inequitable result”); Mancorp, Inc. v.Culpepper, 802 S.W.2d 226 (Tex. 1990) (stating thatcourts may disregard the corporate entity under the alterego theory “when there exists such unity between thecorporation and individual that the corporation ceases to2

Owner Liability Protection andPiercing the Veil of Texas Business EntitiesChapter 5provision to mean that failure to follow corporateformalities is no longer a “factor” in applying the alterego theory of veil piercing. See, e.g., Hoffman v.Dandurand, 180 S.W.3d 340, 347 (Tex.App.–Dallas2005, no pet.); Carone v. Retamco Operating, Inc., 138S.W.3d 1, 13 (Tex.App.–San Antonio 2004, pet.denied); Hall v. Timmons, 987 S.W.2d 248, 250 n. 2(Tex.App.–Beaumont 1999, no pet. hist.); Hunt v.Stephens, 2002 WL 32341814 *5 (Tex.App.–Eastland2002, no pet.)(not designated for publication); Eckhardtv. Hardeman, 1999 WL 33226 * 4 n. 4(Tex.App.–Austin Jan. 28, 1999, pet. denied)(notdesignated for publication); see also Mancorp, Inc. v.Culpepper, 802 S.W.2d 226, 233 (Tex. 1990)(Hecht, J.,dissenting); but see Schlueter v. Carey, 112 S.W.3d 164,170 (Tex. App.--Fort Worth 2003, pet. denied)(considering failure to follow corporate formalitiesalong with other evidence of alter ego and interpretingTBCA Article 2.21 as providing individual may not beheld liable under alter ego theory “based simply” oncorporation’s failure to follow corporate formalities).The suggested instruction for defining the alter ego basisof holding a shareholder liable in Texas Pattern Jurybe separate and when holding only the corporation liablewould promote injustice”); Lucas v. Texas Indus., Inc.,696 S.W.2d 372 (Tex. 1984) (noting policy reasons thatcourts are less reluctant to pierce the veil in tort casesthan breach of contract cases but refusing to pierce thecorporate veil in the tort case in question in the absenceof evidence that the corporate form caused the plaintiffto fall victim to a “basically unfair device by which .[the] corporate entity was used to achieve an inequitableresult”).The statutory actual fraud standard applicable ina veil piercing case does not protect corporateshareholders/officers from liability for their own torts,even though such torts may have occurred while actingon behalf of the corporation in the context of acontractual transaction between the corporation and theplaintiff. Gore v. Scotland Golf, Inc., 136 S.W.3d 26, 32(Tex.App.–San Antonio 2003, pet. denied); Kingston v.Helm, 825 S.W.3d 755, 764-67 (Tex.App.–CorpusChristi 2002, pet. denied); but see Glenn D. West andAdam D. Nelson, Corporations, 57 SMU L. REV. 799,805-08 (2004) (disagreeing with application of agencylaw to impose liability on corporate officer in Gore v.Scotland Golf, Inc.); Glenn D. West and Susan Y. Chao,Corporations, 56 SMU L. REV. 1395, 1403-08 (2003)(disagreeing with application of agency law to imposeliability on corporate officer in Kingston v. Helm).personal liability on a shareholder for the obligations of thecorporation by disregarding the separate corporate entity evenif, pursuant to the agreement, the corporation operates as if itwere a partnership or fails to observe corporate formalitiesotherwise applicable.Article 2.30-1 was added to the TBCA in 1997, andits requirements (and those of its successor provisions in BOCSections 21.101-21.109) are somewhat simpler than thoseimposed under the Texas Close Corporation Law found at Part12 of the TBCA and Sections 21.701-21.732 of the BOC. Inorder to be a “close corporation” governed by the Texas CloseCorporation Law, the articles of incorporation or certificate offormation of the corporation must contain the followingstatement: “This corporation is a close corporation.”Additionally, a close corporation that operates pursuant to ashareholders’ agreement under the Texas Close CorporationLaw must file a statement of operation as a close corporationwith the Secretary of State. Part 12 of the TBCA andSubchapter O of Chapter 21 of the BOC also contain aprovision that protects shareholders of these special statutory"close corporations" against veil piercing. This protectiveprovision states that neither the failure of a close corporationto observe usual formalities or the statutory requirementsprescribed for an ordinary corporation, nor the performance ofa shareholders’ agreement that treats the close corporation asif it were a partnership or in a manner that otherwise isappropriate only among partners, is a factor in determiningwhether to impose personal liability on the shareholders for anobligation of the close corporation by disregarding theseparate corporate existence or otherwise. Tex. Bus. Corp.Act art. 12.37F; Bus. Org. Code § 21.730.3.De-Emphasis of Corporate FormalitiesThe Texas legislature has addressed therelevance of failure to follow corporate formalities inthe veil piercing context. Traditionally, the failure tofollow corporate formalities has been a factor in alter egoveil piercing cases. Article 2.21A(3) of the TBCA andSection 21.223(a)(3) of the BOC now provide thatfailure to follow corporate formalities is not a “basis” tohold a shareholder or affiliate liable for any obligation ofthe corporation.2 Courts have generally interpreted this2In addition to the veil piercing provisions contained inTBCA Article 2.21 and BOC Section 21.231, which areapplicable generally to Texas corporations, there are specialprovisions in Article 2.30-1 and Part 12 of the TBCA andSubchapter C (Sections 21.101-21.109) and Subchapter O(Sections 21.701-21.732) of Chapter 21 of the BOC. Theseprovisions permit a closely held corporation to operatepursuant to a shareholders’ agreement that dispenses withtraditional corporate features if certain requirements are met.TBCA Article 2.30-1and BOC Section 21.101allowshareholders of a closely held corporation to structure thecorporation to alter or dispense with traditional corporate rulesand norms if certain conditions and requirements set forth inthe statute are met. TBCA Article 2.30-1G and BOC Section21.107 state that the existence or performance of ashareholders’ agreement shall not be grounds for imposing3

Owner Liability Protection andPiercing the Veil of Texas Business EntitiesChapter 5Charges conspicuously omits any reference to “failure tofollow corporate formalities.” See PJC 108.2.Champion with all forms necessary forbusiness, performed services forChampion, and that Superior paid all ofChampion's bills, expenses, andemployee salaries. In our opinion, thisis sufficient to show that the twocorporations did not operate as"separate entities but rather integrate[d]their resources to achieve a commonbusiness purpose."4.The Rise of the Single Business EnterpriseTheoryOver the past twenty years, the “single businessenterprise” veil piercing theory has emerged in Texas.Under this theory, the assets of affiliates of a corporationmay be reached to satisfy the liability of the corporationif the corporation and the affiliates constitute a “singlebusiness enterprise.” In Superior Derrick Services, Inc.v. Anderson, 831 S.W.2d 868 (Tex.App.—Houston [14thDist.] 1992, writ denied), the court, in addressingwhether the evidence was sufficient to hold onecorporation ("Superior") jointly and severally liable forthe debt of another corporation ("Champion") on thebasis that they operated as a single business enterprise,stated:831 S.W.2d at 875.There is a growing body of Texas case lawaddressing the single business enterprise theory.Recently, the Texas Supreme Court declined to eitherendorse or disapprove of the single business enterprisetheory. Southern Union Co. v. City of Edinburg, 129S.W.3d 74, 87 (Tex. 2003) (“We need not decide todaywhether a theory of ‘single business enterprise’ is anecessary addition to the theory of alter ego fordisregarding corporate structure or the theories of jointventure, joint enterprise, or partnership for imposingjoint and several liability.”). The court stated that itneed not address the parameters of the single businessenterprise theory because, whatever label was applied,the plaintiff’s attempt to treat various entities as a singleentity was encompassed within Article 2.21 of theTBCA, and the plaintiff failed to satisfy the actual fraudstandard imposed by the statute. Thus, the court joinedother courts that have concluded the single businessenterprise theory falls within the scope of Article2.21A(2), which requires a showing of actual fraud inorder to hold a shareholder or affiliate liable for acorporation’s contractual or contractually-relatedobligation on the basis of alter ego, actual fraud,constructive fraud, sham to perpetrate a fraud, “or othersimilar theory.” Southern Union Co. v. City of Edinburg,129 S.W.3d 74, 87-89 (Tex. 2003); Olympic FinancialLtd. v. Consumer Credit Corp., 9 F.Supp.2d 726 (S.D.Tex. 1998); Nordar Holdings, Inc. v. Western Securities(USA) Ltd., 969 F.Supp. 420 (N.D. Tex. 1997). Thesecases illustrate the difficulty a plaintiff faces in a veilpiercing case when the statutory actual fraud standard isapplicable. In each of these cases, the plaintiff’s veilpiercing claim failed for lack of a showing of actualfraud. In the tort context, however, the single businessenterprise theory has proved a more potent weapon.See, e.g., North American Van Lines v. Emmons, 50S.W.3d 103 (Tex.App.–Beaumont 2001, no pet.); Hallv. Timmons, 987 S.W.2d 248 (Tex.App.–Beaumont1999, no pet.); Nichols v. Pabtex, Inc., 151 F.Supp.2d772 (E.D. Tex. 2001).The "single business enterprise" theoryinvolves corporations that "integratetheir resources to achieve a commonbusiness purpose."ParamountPetroleum Corp. v. Taylor RentalCenter, 712 S.W.2d 534, 536(Tex.App.—Houston [14th Dist.] 1986,writ ref'd n.r.e.).In determiningwhether two corporations had not beenmaintained as separate entities, thecourt may consider the followingfactors: (1) common employees; (2)common offices; (3) centralizedaccounting; (4) payment of wages byone corporation to another corporation'semployees; (5) common business name;(6) services rendered by the employeesof one corporation on behalf of anothercorporation; (7) undocumented transfersof funds between corporations; and (8)unclear allocation of profits and lossesbetween corporations. Id.831 S.W.2d at 874.Though some of the factors were absent, thecourt found the evidence sufficient to uphold the findingthat the two corporations in question operated as a singlebusiness enterprise.The evidence showed that a Superiorstockholder formed Champion,Superior provided office space forChampion in the same building asSuperior's offices, Superior provided4

Owner Liability Protection andPiercing the Veil of Texas Business EntitiesChapter 5In North American Van Lines v. Emmons, 50S.W.3d 103 (Tex.App.–Beaumont 2001, no pet.), thecourt held that the single business enterprise theory isdistinct from the alter ego theory and that the evidencesupported the jury’s finding that a parent and subsidiaryconstituted a “single business enterprise” even thoughthe evidence was insufficient to establish alter ego.According to the court, the alter ego theory “generallyinvolves proof of fraud,” whereas the single businessenterprise theory “relies on equity analogies topartnership principles of liability.” The single businessenterprise theory “looks to see if principles of equitysupport a holding that the two entities should be treatedas one for purposes of liability for their acts.” The courtfound that the control the parent exercised over itssubsidiary was “part of the normal framework of aparent/subsidiary relationship” and did not require afinding of alter ego. However, the court concluded thatthe evidence was sufficient for the jury to find that theparent and subsidiary were operated as a single businessenterprise. The evidence included the following:common officers, common employees, the subsidiarywas created so that the parent’s agents in Texas couldpool their authority and create a broader coverage in thestate, the parent described its relationships with itsagents as a mutually dependent and cooperativeenterprise, the parent received all the profits from thesubsidiary, the van driver was wearing a uniform withthe parent company’s name on it for a move purportedlyon behalf of the subsidiary, the parent performed variousadministrative functions for the subsidiary, and theaccident report described the driver as a driver of theparent company. The case was a personal injury casearising out of the negligent operation of a moving van;therefore, the court was not required to address whetherthe actual fraud requirement of Article 2.21A(2) of theTBCA applies to the single business enterprise theory.In De La Hoya v. Coldwell Banker Mexico, Inc., 125Fed.Appx. 533, 538-39 (5th Cir. 2005), the Fifth Circuitinterpreted the Texas Supreme Court’s decision inSouthern Union as limited to contract cases and held thata showing of actual fraud is not required to imposeliability under the single business enterprise theory in anegligence case.The single business enterprise theory continuesto find acceptance in the courts of appeals even thoughthe Texas Supreme Court appeared to express doubtsabout the theory in the Southern Union case. In NationalPlan Administrators, Inc. v. National Health Ins. Co.,150 S.W.3d 718, 744 (Tex.App.–Austin 2004, pet.granted), the court of appeals noted that the TexasSupreme Court has not spoken on the viability of the“single business enterprise” theory,

circumstances to "pierce the corporate veil.” B. Piercing the Corporate Veil A short discussion cannot do justice to the developments in the area of corporate veil piercing in Texas over the last 20 years; however, a brief summary is provided below. 1. Alter Ego Theory Traditionally, most veil piercing cases were premised on the alter ego theory.

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Body piercing includes piercings of body sites other than the earlobe, such as the face, nose, nipple, genitalia, tongue, lip, brow and others. Upon completion of the piercing, jewellery is inserted into the piercing site. Infection risk: Microorganisms can infiltrate the tissue under the skin or mucous membrane at the

applied. As one such technology, the self-piercing riveting (SPR) method is gaining much attention. The fatigue strength of the SPR joints has been investigated by a number of authors for a number of materials [1-5]. For example, Fu and Mallick [1] examined the static and fatigue strengths of self-piercing rivet joints in aluminum alloy sheets.

Piercing the Corporate Veil as a Remedy of Last Resort after Prest v Petrodel Resources Ltd: Inching towards Abolition? Dr Edwin C. Mujih* Abstract This article analyses the veil-piercing rule in the light of the June 2013 decision of the Supreme Court in Prest v Petrodel Resources Ltd. The article examines many issues relating to the rule

Tattoo & Body Piercing Insurance Application 011121 Page 1 of 6 RSGprograms.com . 10. Hired and Non-Owned Liability: Exclude Include 11. Employee Benefits Liability: Exclude Include 12. Disease Sublimit ( 25,000/ 25,000): Exclude Include 13. .

Anatomy of a journal 1. Introduction This short activity will walk you through the different elements which form a Journal. Learning outcomes By the end of the activity you will be able to: Understand what an academic journal is Identify a journal article inside a journal Understand what a peer reviewed journal is 2. What is a journal? Firstly, let's look at a description of a .