Reverse Piercing And The Myth Of Limited Liability - Beware Of The Alter Ego

A novel situation has presented itself in recent court decisions. In 2004, the New York Court of Appeals ruled in favor of granting a new type of remedy, reverse piercing. Piercing the corporate veil is a fancy way of saying that the shareholders of an entity are personally liable for the debts and liabilities of that entity. This means that if the entity does not have enough money to pay all debts and liabilities, creditors came attack a shareholder’s personal holdings.

Reverse piercing is different. In a reverse piercing situation, an entity is held liable for the debts and liabilities of its shareholders. This is an amazing theory because the whole point of a limited liability entity is to protect the personal assets of its shareholders and vice versa. In other words, the shareholders and the business are two completely separate entities. However, many of the factors used by the court to determine whether an entity should be pierced are used in determining whether a reverse piercing should take place.

The main inquiry is whether the individual shareholder is the alter ego of the entity. In other words, are the two distinguishable (in a legal sense)? In the New York case, the defendants were sued by two creditors. The defendants contracted to buy a house and formed a corporation for the purpose of buying the house. The defendants, and not the defendant’s corporation, paid the property taxes and mortgage principle and interest on the house. The defendants then deducted the payment of these taxes and mortgage interest from their, and not the corporation’s, tax return. The court concluded that the defendants bought the house in a way to avoid the creditors’ claims, and the defendants utterly controlled and completely dominated the corporation. As such, the court held that the defendants were the alter ego of the corporation, and the house purchased by the corporation (and therefore the property of the corporation) was subject to the creditors’ claims.

Let this be a lesson to all you aspiring entrepreneurs! If you have a corporation, or any legal limited liability entity, make sure that you keep the entities affairs separate from your personal affairs. If you do commingle these affairs, you may be subject to personal liability or, under a reverse piercing theory, your entity may be liable for your personal debts and liabilities.

M. Angioni II is the creator of Cashspeak! Money, Ideas & Motivation for the New Entrepreneur!

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Growing Demand For Healthy Restaurant Food Not Being Met Means Opportunity

The number of people dining out is steadily rising, and so is the number of restaurants that are catering to this demand for ready made food.

At the same time, people are becoming more and more savvy about the consequences of poor eating habits and the effect that bad diet choices have on their weight and overall health.

These two trends are coming together in a big way that is having a serious impact on the overall statisfaction of diners on their choices in the restaurant world. While people want to eat out and enjoy the conveneince of the restaurant experience, they also want to be able to pick meals that are healthy as well as great tasting.

In this aspect, the current restaurant choices are largely failing them, creating a great opportunity for anyone looking to start a restaurant now.

According to this article, restaurant consumers are more and more demanding healthy food choices, but they are not finding the meu's to their satisfaction at the major chain restaurants.

This is not surprising really, since most chains weren't originally designed to serve healthy food and so are trying to adept their existing themse and menus to support this type of meal.

The other challenge, of course, is in finding truly tasty meals that can be prepared that are still healthy and will meet the food cost requirements and preparation time requirements of running a successful restaurant.

As has been speculated before, the next big success in the restaurant business will come from a ground up healthy food that tastes great innovator. Right now the field is wide open- so jump in!

The main thing to focus on as a new restaurant is promoting and offering great tasting food. If the food is healthy, but doesn't taste especially good, people are going to feel satisfied paying good money to eat out at a place they don't enjoy.

Therefore, the key is to create great tasting food first, and promote that aspect, and only then let people know it is also good for them. At that point, word of mouth will do the rest and there will soon be more customers than you can handle.

The other area to focus on is convenience. The main push for health food is from the office crowd who don't have a lot of time for lunch and hate having to compromise their health eating fast food just because it is the only choice that will come in time.

So, start a restaurant serving great tasting food, that is healthy and served fast, and you will have a super successful restaurant, soon to be a chain, on your hands.

The ultimate guide to creating a "guaranteed to get funded" restaurant business plan quickly and easily was created by the author, former restaurant owner and full time startup business consultant Matt Remuzzi, owner of the website CapForge.com, one of the top web hubs for information on starting a business.

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