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Can a Presiding officer of corporation sole lose his personal assets

San Mateo, CA |

If the corporation sole can't make good on a debt but is trying to make payment s, can the creditor attach a lien on the personal assets of the presiding officer not titled to the corporation sole? Thanks

Corporation sole -- a bone fide religious organization under the laws of California

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Attorney answers 4


As a NY attorney, I advise you to seek a free consult from a local attorney in CA.


Generally, officers and shareholders' assets are protected from the creditors of a corporation. A corporation is its own person under the law and it is responsible for its own debts. There are exceptions, however, particularly if a sole officer/shareholder does not follow corporate formalities. You should seek an attorney who is knowledgeable about corporations and religious corporations, in particular.

I am licensed only in California and this response is provided as general information only. It is not intended to be legal advice. Legal advice must be based on the exact facts of the particular situation, and by necessity this forum is not appropriate for discussion of specific, exact facts. Contact a lawyer for more specific advice. My answer to your question on AVVO does not create an attorney-client relationship.


The possibility exists, yes. If the plaintiff is able to "pierce the corporate veil" by proving an alter ego theory, the presiding officer's assets might be at risk.

In order to establish personal liability against the individual officers and shareholders, the plaintiff would have to prove that the corporation is the alter ego of the individuals. The alter ego doctrine can be used to "pierce the corporate veil" to obtain personal liability against individuals who own and control a corporation. In order to raise an alter ego allegation, a plaintiff must provide sufficient facts to show that:

(1) the corporation is not only influenced and governed by a person, but also that there is such a unity of interest and ownership that the individuality, or separateness, of such person and the corporation has ceased and

(2) an adherence to the fiction of the separate existence of the corporation would, under the particular circumstances, sanction a fraud or promote injustice.

(Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 837.)

Other factors which have been described in the case law include commingling of funds, inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, and identical directors and officers. No one characteristic governs, but the courts must look at all the circumstances to determine whether the doctrine should be applied.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult with your own attorney.


I agree with Ms. Bennett. You should personally consult with an attorney in your area to discuss you concerns.

I am licensed in California only and my answers on Avvo assume California law. Answers provided by me are for general information only. They are not legal advice. Answers must not be relied upon. Legal advice must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. I provide legal advice during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us. The communications on this website are not privileged or confidential and I assume no duty to anyone by my participation on Avvo or because I have answered or commented on a question. All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice in answer to any question, if you are an interested party you should promptly and personally consult with an attorney for legal advice. Also, see Avvo's terms and conditions of use, specifically item 9, incorporated by this reference

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