Piercing the Corporate Veil

Smith Services Inc., was a corporation that had Tony Smith as its sole shareholder. During the Company's operational days, it charged its fuel to an account at Lakers Express, a company owned by Bear Inc., with the promise that it will pay once they got payment for the projects on which they had been working. Unfortunately, Smith dissolved the corporation before having the chance to clear his debt with Lakers Express. Bear Inc. filed a suit demanding payment from Tony that he should personally pay the corporation's debts on the basis that he was hiding behind the corporate form and using the protection to defraud other businesses including Bear Inc. (Law, 2019).

During the process of incorporation, an individual needs a chosen name, an agent, an incorporator, directors, preferred shares and the authorized number,

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