THE LIMITS OF LEGAL PERSONALITY – PIERCING THE CORPORATE VAIL – CASE STUDYyiannatsis
Emmanuela Hatzidaki, Lawyer
We often encounter the phenomenon of natural persons and entrepreneurs who, in an effort to protect their personal property against their creditors, whether suppliers or employees, operate through a corporate form (mainly LLP or S.A.). The same phenomenon occurs in groups of companies, where the parent company operates essentially through its subsidiaries, indebting them and eventually leading them to bankruptcy, thus avoiding the payment of debts owed to its creditors.
However, the creditor of such company may, on the basis of criteria defined by case law itself, seek to prove the true owner of the company, thereby succeeding in removing the legal independence of either the company or the group of companies, in order to satisfy its claims.