Incorporate and benefit from the corporate veil

In tough economic times, many Americans closely monitor where their dollars go. The environment lends itself to lawsuits when people feel they are not getting their money’s worth.

This might inspire businesses to go above and beyond in order to satisfy clients who trust them with limited funds. It might also inspire them to undergo business formation and protect themselves against lawsuits.

This proved a beneficial move for Frazao Building Corporation. In 2009, the construction company was sued for failing to complete a job to the customer’s satisfaction, reports Leagle.com.

While the source says the job was left incomplete, the courts still ruled in favor of the corporation. The judge refused to hold the shareholders responsible and ruled that "no fraud was committed that resulted in an injury to the plaintiff" on the company’s part.

Leagle.com says that this ruling is representative of courts’ hesitancy to pierce the corporate veil. In general, it claims that courts tend to rule against corporations only in cases of outright fraud.

Limited liability is one of the many benefits business incorporation offers entrepreneurs. Business owners can visit online incorporation service websites to learn more about how to incorporate their ventures.