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Originally Posted by Shaze
if your a owner in a corporation that files for bankruptcy does your credit get screwed also????
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NO. Unless the creditors sue you and "pierce the corporate veil." ONE OF THE MAIN REASONS why the legal concept of corporations was created was to protect entrepreneurs' personal assets from loss arising from their business ventures.
How to pierce the corporate veil?
1) The corporation is weakly capitalized (ie., your corp doesn't have enough cash in it's own account to cover its operating expenses)
2) The corporation is an ALTER EGO of the shareholder -- ie., personal funds in corporate account, corporate assets used for personal reasons, etc
3) Disregarding corporate form -- ie., you don't hold annual shareholder meetings, no minutes, no separate corporate forms, etc etc.
What happens when the corporate veil is pierced successfully? Your personal assets are used to pay creditors for losses arising from corporate activities and your credit gets FUCKED accordingly
