Piercing

Sky-Track Tech. Co. Ltd. v HSS Dev., Inc., 2018 NY Slip Op 08708 [2d Dept. 2018]

“The general rule . . . is that a corporation exists independently of its owners, who are not personally liable for its obligations, and that individuals may incorporate for the express purpose of limiting their liability” (East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 66 AD3d 122, 126, affd 16 NY3d 775). “The concept of piercing the corporate veil is an exception to this general rule, permitting, in certain circumstances, the imposition of personal liability on owners for the obligations of their corporation” (id. at 126). “A plaintiff seeking to pierce the corporate veil must demonstrate that a court in equity should intervene because the owners of the corporation exercised complete domination over it in the transaction at issue and, in doing so, abused the privilege of doing business in the corporate form, thereby perpetrating a wrong that resulted in injury to the plaintiff” (id.see Matter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 142; JGK Indus., LLC v Hayes NY Bus., LLC, 145 AD3d 979, 980). “Factors to be considered in determining whether the owner has abused the privilege of doing business in the corporate form’ include whether there was a failure to adhere to corporate formalities, inadequate capitalization, commingling of assets, and use of corporate funds for personal use'” (East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 66 AD3d at 127, quoting Millennium Constr., LLC v Loupolover, 44 AD3d 1016, 1016-1017).

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