Sioux Falls Startup Attorneys & Lawyers

What Does It Mean to Pierce the Corporate Veil?

Piercing the corporate veil is when the courts ignore the "corporate veil" placed on an LLC or corporation. A corporate veil is when a business is incorporated so that its owners, shareholders, and employees will not be held personally responsible if the business can't pay its debts. A corporate veil is also known as limited liability.

LLCs and corporations are legally separate from their owners and shareholders — this is what allows the veil to work.

Why is the Ability to Pierce the Corporate Veil Important?

Piercing the veil can help protect smaller businesses from larger ones. For example, if a large business refuses to pay a smaller one for provided services.

Also, it can be used to force corporations to comply with government programs. However, courts are reluctant to

...

What Is a Clickwrap Agreement?

Clickwrap is an online agreement between a user and a company that requires the user to click a box or a button before they download content, make a purchase, or use a website. The box or button confirms that the user agrees to an online contract with the company, and substitutes for the user's signature.

In a clickwrap agreement, in order to use a website or download content, the user has to check a box saying they've read and agree to the terms and conditions that apply to the website or software. Sometimes the agreements are many pages long and difficult to read. They usually contain two things:

• A checkbox or button
• A notice telling you that you agree to the terms if you click the box

Clickwrap agreements are also called:

• Clickthrough agreements
• Clickwrap licenses

Types of clickwrap (and browsewrap) include:

...

...

Warrants and options are securities that are related in a lot of ways although they have a few significant differences. Options and warrants both give owners the right, but not the obligation to either buy or sell a principal security at an agreed upon price within a given time.

While a warrant is issued directly by the company or banks that act on behalf of the company, in options the shares are received or given by one investor to another. Unlike stock options, new shares are issued by the company when the stock warrant is created. Warrants are created based on the issuer of warrant and is always fluctuated in such a way that it meets the interest of the issuer. Where in options, no such variables are seen which is one sided.

Within the context of startups, an option is the right to purchase an existing share of a company’s stock from the company at a specific price (typically fair market value of that share on the issue date

...

Corporations are the basic and traditional business entity in this and many other countries. Unless a corporation can qualify for what is called ‘pass through’ treatment by electing to be taxed under a part of the Internal Revenue Code called Subchapter S , a corporation is taxed similarly to the way an individual is taxed. Being subject to the default tax treatment is what makes a corporation a “C Corp;” being able to qualify for pass-through treatment, and actually making an election to do so, makes a corporation an “S Corp.” They are the same type of business entity, taxed differently, and a corporation may be both a C Corp and an S Corp at different times in its existence.

C Corporations pay tax on their net income, just like individuals do. So all revenues are reported each year to the IRS on Form 1120, as are all allowable deductions for business expenses, which may include compensation to employees, payments to

...