Bulletproofing A Corporation And Trust

Any advice on making a corporation as bulletproof as possible. How do you avoid someone piercing the corporate veil so to speak? I'm in CA and would like to put our properties into a trust with the beneficiary as the corporation. I'd like to have the corporation be the trustee but am afraid of the corporation being a target. Any advice or thoughts? Thanks. confused

Comments(1)

  • jhgraves11th September, 2003

    Corporations are generally pretty bulletproof. Short course on piercing the veil: Usually only happens when (1) there is a unity of interest between coporation and shareholder (present) and (2) inequitable result (probably not).

    The biggest no-no is to co-mingle funds with personal assets. The second is to not issue stock (not an option in some states) or to be too thinly capitalized. If the Coporation draws its working capital directly from the shareholders pockets it gets easier to pierce the veil.

    Use caution to seperate the coporate records, financial etc. and be sure to follow all CA requirements as far as board meetings, etc.

    Also, lenders usually want personal guarantees of loans, this is sometimes used as evidence of co-mingling.
    And the grand finale: Don't use the corporate structure to defraud and you should take on at least some of the characteristics of Kevlar. When in doubt seek advice from an attorney.

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