Business Law Journal

In the midst of the ongoing Coronavirus (COVID-19) pandemic, many state and local governments are recommending or imposing restrictions on gatherings of people, including at places of business. In some cases, certain businesses such as bars and restaurants are being required to close or modify their business operations. Additionally, many individuals are staying home and avoiding public places.

As more and more businesses shut down or scale back due to the Coronavirus pandemic, Federal, State and local governments are quickly realizing that these businesses and their employees are facing devastating financial consequences. 

As the COVID-19 Coronavirus (“COVID-19”) outbreak spreads, more and more public gatherings and events have been cancelled or postponed, including major sporting events like the NCAA Final Four tournament, and the NBA, MLS, and MLB seasons.  In addition, some businesses are directing their employees to work from home or temporarily shutting down all together in order to combat the spread of COVID-19. 

Owners conducting business through a legal entity often do so to limit personal liability and to protect assets unrelated to the business from commercial risks.  However, once formed, owners sometimes jeopardize those exposure limiting objectives by filing away their incorporation documents and neglecting corporate formalities.  That approach may work fine until, of course, an adverse party argues that the business entity should be disregarded as an ‘alter ego’ of the owners.