Alter Ego Rule | Definition

Alter Ego Rule

The Alter Ego Rule is a legal principle that applies when one person or entity is so closely connected to another person or entity that they should be treated as the same for legal purposes.


The Alter Ego Rule is often used in situations where one person or entity is using another as a means to evade legal responsibilities or liabilities. For example, the Alter Ego Rule might be applied in a case where a person establishes a separate business entity in order to avoid personal liability for the actions of the business. In such a case, a court may “pierce the corporate veil” and hold the individual personally liable for the debts or liabilities of the business if it determines that the individual was using the business as an alter ego. The Alter Ego Rule can also apply in situations where one person or entity is controlled or dominated by another or where there is a lack of separation between the two.


[ Glossary ]


 

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