Don't Pay Your Dog's Vet Bills With Corporate Funds
The Eastern Section Court of Appeals recently ruled on a textbook example of failing to follow the corporate form. In Dolle v. Fisher, the defendant was president, secretary, and registered agent for a construction corporation. After a judgment was entered against the corporation, he folded it and set out to start anew under a different name. The evidence that his corporation was a sham included:
- He "compiled" corporate minutes only about a month before trial.
- He paid for his own medical and dental bills from the corporate checking account. (He testified that the bylaws allowed for it, but they made no mention of paying for the president's health care.)
- He paid for improvements to his own house from the corporate checking account.
- He paid his own personal income taxes from the corporation's checking account.
- He was uncertain whether he paid for his dog's veterinarian bills from the corporate checking account.
It's difficult to pierce the corporate veil under Tennessee law. If you're paying your dog's vet bills with corporate funds, though, you might as well not waste your money registering with the Secretary of State.
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