An “alter ego” refers to a second self or a distinct personality within a person. This term is commonly used to describe a character or persona that someone adopts, often in contrast to their usual personality. “In a legal context, the term ‘alter ego’ refers to a situation in which a court disregards the legal personality of a corporation or entity. Instead, it treats it as the alter ego of an individual or another entity. This is usually done when it appears that the corporate form is being abused or used to perpetrate a fraud.
For instance, if someone engages in fraudulent activities or uses a corporation to shield themselves from personal liability in an unjust way, a court may ‘pierce the corporate veil’ and treat the actions of the individual and the corporation as one and the same. This can happen when an individual or another entity controls and dominates the corporate entity to an extent that it becomes their alter ego.
Piercing the corporate veil is a legal doctrine that is only applied in specific circumstances to hold individuals or other entities personally liable for the actions of a corporation. It’s a serious matter, and courts usually require evidence of improper conduct or abuse of the corporate form before applying this doctrine. This legal concept is significant in corporate law and can have far-reaching implications for liability and accountability.”
