Tag Archives: Corporate Formation
For various reasons, a corporation’s limited liability shield for its shareholders is one of the corporation’s most valuable assets. Unfortunately, some individuals may abuse the corporate form’s limited liability status by using it to mislead or defraud creditors. For various reasons, a corporation’s limited liability shield for its shareholders is one of the corporation’s most valuable assets. Unfortunately, some individuals may abuse the corporate form’s limited liability status by using it to mislead or defraud creditors. Read Full Post
Is the LLC Right for your New Business?: Pros and Cons of Structuring Your Business as a Limited Liability Company
You have created your business plan and now you are ready to put your plan into motion and start your own company. The next step is to consider which business structure suits your business. A business can be structured as a sole-proprietorship, partnership, limited partnership, corporation, S-corporation, or a limited liability company. The limited liability company structure boasts many advantages, but also brings with it some disadvantages to consider. Read Full Post
Setting Aside Fraudulent Transfers Part I: What to Look For When Going After Officers or Successor Company
By Charles B. Jimerson, Esq. and Brittany Snell, Esq.
You have a claim against a corporation and/or its officers, but you find out that the corporation is dissolved and there is a successor corporation in its place that appears to be essentially the same corporation. Now what? In Bernard v. Kee Mfg. Co., Inc., Florida’s Supreme Court adopted the traditional corporate law rule and its exceptions by holding that the liabilities of the selling predecessor will not be imposed on the buying successor company “unless (1) the successor expressly or impliedly assumes obligations of the predecessor, (2) the transaction is a de facto merger, (3) the successor is a mere continuation of the predecessor, or (4) the transaction is a fraudulent effort to avoid liabilities of the predecessor.” 409 So. 2d 1047, 1049 (Fla. 1982). Based on the foregoing, a claimant must prove one of these exceptions to the general rule to implicate the liability of the successor corporation on behalf of the predecessor company. In this bLAWg post, we will focus on the successor’s liability pursuant to the fraudulent effort to avoid liabilities. Note, this particular issue may be closely linked to improper dissolution or failure to properly wind down, but that is a topic for another discussion interrelated to a creditor seeking recovery from officers, shareholders, and corporations. Read Full Post