alter ego

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Alter Ego

A doctrine used by the courts to ignore the corporate status of a group of stockholders, officers, and directors of a corporation in reference to their limited liability so that they may be held personally liable for their actions when they have acted fraudulently or unjustly or when to refuse to do so would deprive an innocent victim of redress for an injury caused by them.

A corporation is considered the alter ego of its stockholders, directors, or officers when it is used merely for the transaction of their personal business for which they want Immunity from individual liability. A parent corporation is the alter ego of a subsidiary corporation if it controls and directs its activities so that it will have limited liability for its wrongful acts.

The alter ego doctrine is also known as the instrumentality rule because the corporation becomes an instrument for the personal advantage of its parent corporation, stockholders, directors, or officers. When a court applies it, the court is said to pierce the corporate veil.

Courts have not traditionally applied the alter ego doctrine to other business forms, such as partnerships and limited partnerships, because partners generally do not enjoy the same form of limited liability as corporate stockholders, officers, and directors. By comparison, however, owners of limited liability companies may structure their business in a manner similar to a corporation so that members and managers are shielded from personal liability for the debts of the Limited Liability Company (LLC). Several courts have determined that the alter ego doctrine may also apply to LLCs. For instance, in Kaycee Land & Livestock v. Flahive, 46 P.3d 323 (Wyo. 2002), the Wyoming Supreme Court held that the equitable doctrine of piercing the veil was an available remedy under the Wyoming Limited Liability Company Act.


Corporations; Immunity; Liability.

alter ego

n. a corporation, organization or other entity set up to provide a legal shield for the person actually controlling the operation. Proving that such an organization is a cover or alter ego for the real defendant breaks down that protection, but it can be difficult to prove complete control by an individual. In the case of corporations, proving one is an alter ego is one way of "piercing the corporate veil." In a lawsuit complaint, it might be stated (pleaded) that "the Hotshot Corporation was the alter ego of Joseph Snakeoil."

alter ego

noun alternate, counterpart, double, living image, match, other, other half, other person, other self, perfect substitute, second self, shadow, stand-in, twin
Associated concepts: agent, alter ego doctrine, corporate alter ego, piercing the corporate veil, separate corporate entity
See also: complement, counterpart
References in periodicals archive ?
Building on that demand, the brands will debut a broader range of Under Armour Alter Ego products, including an expanded collection of baselayer featuring both women's and girls' products, as well as a variety of apparel, footwear and gloves.
Student Fiona Wharmby, 19, said: "The work is in response to a project on the theme of Alter Egos.
I said to the guys, 'Hey, how about disguising ourselves and getting an alter ego, because we're The Beatles and we're fed up'," the Daily Express quoted Macca, as saying.
Welton Becket's] alter egos, successors and/or assigns, and that a hearing, and attendant disclosure, is needed in order to determine the relevant relationships and, ultimately, the proper parties to the arbitration.
None of which will really matter if people don't buy Maguire - a sensitive young actor whom no one previously thought of in superheroic terms - as both of the wall-crawler's complicated alter egos.
The Webber case involves numerous other issues -- including whether the borrower and its affiliates were alter egos, whether California's purchase money anti-deficiency rules applied to deprive the junior lender of an unsecured claim as a sold-out junior, and whether the junior lienholder had actual damages -- however, these issues are beyond the scope of this update.
Two of today's hottest young actresses, Mira Sorvino, left, and Ashley Judd, star as alter egos of the screen's most enduring icon
A futuristic adventure set in cyberspace, the film follows the exploits of a young computer genius who gets blasted into an electronic world, where computer programs are the alter egos of the programmers who created them.
Figgis tracks their separate, nearly intersecting paths but also implies that they are just alter egos of the same person (although one of the alter egos sleeps with women).
Attributional nexus refers to a state's imposing its taxing jurisdiction on a corporation that has no direct nexus with the state solely because the corporation has an agency, alter ego, or unitary relationship([single dagger]) with a corporation (or other business or individual) that does have direct nexus with the state.