Braswell v. United States, 487 U.S. 99 (1988) - Essay Example

Braswell v. United s, 487 U.S. 99 (1988) The Alter Ego Doctrine and the Doctrine of Piercing the Corporate Veil The alter ego doctrine is a legal principle that undermines doctrine of separate legal entity of a corporation, from its shareholders and other officers and induces liability for action that the stakeholders commit. Application of the doctrine is limited to cases where the stakeholders have acted with fraud or unethically or when actions by an officer or shareholder has led to injury of a party and failing to establish a personal liability would hinder justice to the injured party.

A corporation is the alter ego that the members use for personal gain with the hope of escaping liability to the corporation. The courts however use the doctrine to deviate from the limited liability concepts in corporate organization to hold people responsible for action that target selfish interests. The doctrine of piercing the corporate veil is a corollary to the alter ego doctrine and involves breaching of the separate legal entity of a corporation to hold shareholders liable for actions that identify abuse of responsibility.

In pronouncing personal liability of a shareholder, a court is said to have pierced the veil (Weil, Lentz, & Hoffman, 2012). The alter ego doctrine and the doctrine of piercing corporate veil are therefore concepts for equitable remedy that seek to protect innocent victims from unethical practices by shareholders, employees, or directors of corporate organizations, for personal gain. The alter ego doctrine establishes deviation from the limited liability concept of corporate organizations and the doctrine of piercing corporate veil is an implementation of the alter ego.

ReferenceWeil, R., Lentz, D. & Hoffman, D. (2012). Litigation services handbook: The role of the financial expert. Hoboken, NJ: John Wiley & Sons.