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It's Extremely Difficult for Anyone to Pierce Your Nevada State Corporate Veil

First, what exactly does "piercing the corporate veil" mean? When you form a corporation, whether it's i

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

n Nevada, California, Texas or wherever, you must follow certain corporate formalities. Remember, a nevada state corporation can do everything you can do except act or think, so it does those

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

things through your board of directors, officers and shareholders. If your corporation does not keep accurate records of meetings by minutes, and if the corporation commingles funds, it make

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

it easier for someone to pierce your corporate veil if the corporation is involved in a lawsuit.

Low capitalization is another reason why corporate veils get pierced. In some states, like C

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

alifornia, we recommend that you capitalize your corporation with at least $1,000. If you don't, it's easier for someone to prove that you are simply the alter ego of the nevada state corpora

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ion (one and the same as the corporation), and then pierce your corporate veil! How does Nevada feel about this? Nevada is called a "thin capital state," meaning you can form a corporation in

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

Nevada for as little as $100. Also, Nevada has a certain attitude about piercing the corporate veil, which is why major corporations domicile in Nevada. Let's explain.

The Nevada State T

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

est - Trying to Pierce the Corporate Veil

First, in Nevada, anyone trying to sue you must pass a three-prong test. They must prove all three parts to pierce your corporate veil: The c

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

rporation must be influenced and governed by the person asserted to be the alter ego.

There must be such unity of interest and ownership that one is inseparable from the other.

The facts mu

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

st be such that adherence to the corporate fiction of a separate entity would, under the circumstances, sanction fraud or promote injustice.

The burden of proof for all three "general requir

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ments" is on the plaintiff who is seeking to pierce the veil, and a failure to prove any of the three will result in your veil not being pierced! Essentially, Nevada says that unless they can

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

prove fraud, your corporate veil will not be pierced. That is awesome protection.

Nevada State Corporation - Case In Point

The landmark case that proves this point is the case of Ro

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

land vs. Lepire (1983). We recommend that you keep accurate corporate records to protect your corporate veil, and make sure you have adequate capitalization as well. In Roland, the corporatio

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

had a negative net worth at the time of the trial so it was clear it was inadequately capitalized. On top of that, the corporation never held formal directors or shareholders meetings, never

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

started or kept a corporate minute book, never paid dividends, and didn't pay salaries to the officers or directors. On the other hand, the corporation managed to secure a corporate checking

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

account, as well as a general contractor's license and a framing contractor's license, "both in its name".

What happened? The court concluded that, "Although the evidence does show that the

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

corporation was undercapitalized and that there was little existence separate and apart from [the two key shareholders]evidence was insufficient to support a finding that appellants were the

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

alter ego of the corporation." The Nevada Supreme Court has made clear that unless the plaintiff acting against you is able to meet the burden of proving that "the financial setup of your cor

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

oration is only a sham and caused an injustice, " your veil is unlikely to be pierced.

The Nevada state corporation appears as an "Iron Fortress" to creditors. In fact, the corporate veil ha

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

s only been pierced two times in Nevada in the last 23 years! And that was a case where the corporation was actually doing business in Nevada and had committed fraud against a Nevada resident

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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An organization can be taken as a collection of individuals who banded together to work for a common goal.

Are you into medical billing? Do you have to bill oxygen claims? No clue what ABG means? Well, in this installment, we cover the GX0 record, fields 24 through 27.

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