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Message: <blockquote data-quote="Snarf Zagyg" data-source="post: 9065645" data-attributes="member: 7023840">Brief interlude.As always, things can change depending on the jurisdiction. What people are discussing here is "piercing the corporate veil."So, for example, in Washington state you must show that "1) the corporate form was intentionally used to violate or evade a duty, and (2) piercing the veil is necessary and required to prevent unjustified loss to the injured party." Maple Valley Park Place, LLC v. Tax Resource Centers, Inc., No. 78832-9-I (Was. Ct. App. 2020). In North Carolina, however, the standard is a two-part test. First, you must show that " "the corporation is so operated that it is a mere instrumentality or alter ego of the sole or dominant shareholder and a shield for his activities in violation of the declared public policy or statute of the State." Green v. Freeman, 749 SE 2d 262, 270 (NC 2013). Evidence to "justify piercing the corporate veil includes inadequate capitalization, noncompliance with corporate formalities, lack of a separate corporate identity, excessive fragmentation, siphoning of funds by the dominant shareholder, nonfunctioning officers and directors, and absence of corporate records."  Id.  Once this has been established, you still have establish that the noncorporate defendant may be held liable for their personal activities as an officer or director (or member for LLCs).  To do this, you would have to show control (complete domination), that such control was used to commit the wrong, and that the control caused the wrong complained of.  Id.If you peer closely, you will see that the two rules are actually very similar, although the devil is in the details.When people are talking about "comingling," what they are saying is that there was a disregard of corporate formalities and the corporate forms are simply instrumentalities (alter egos) of an individual. The most common problem is comingling of assets. However, while it would be de minimis, it is also the case that using businesses interchangeably to promote each other wouldn't help.The problem with the above hypothetical (ESPN and Little Mermaid) is that they are all part of Disney. Theoretically, all of these are completely separate businesses, with the only commonality that they have a member in common.</blockquote>

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