instrumentality rule

instrumentality rule
Under this rule, corporate existence will be disregarded where a corporation (subsidiary) is so organized and controlled and its affairs so conducted as to make it only an adjunct and instrumentality of another corporation (parent corporation), and parent corporation will be responsible for the obligations of its subsidiary. Taylor v. Standard Gas & Electric Co., C.C.A.OW., 96 F.2d 693, 704.
The so-called "instrumentality" or "alter ego" rule states that when a corporation is so dominated by another corporation that the subservient corporation becomes a mere instrument and is really indistinct from controlling corporation, then the corporate veil of dominated corporation will be disregarded, if to retain it results in injustice. National Bond Finance Co. v. General Motors Corp., D.C.Mo., 238 F.Supp. 248, 255

Black's law dictionary. . 1990.

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  • instrumentality rule — A principle of corporate law that permits a court to disregard the corporate existence of a subsidiary corporation when it is operated solely for the benefit of the parent corporation, which controls and directs the activities of the subsidiary… …   Law dictionary

  • instrumentality rule — Under this rule, corporate existence will be disregarded where a corporation (subsidiary) is so organized and controlled and its affairs so conducted as to make it only an adjunct and instrumentality of another corporation (parent corporation),… …   Black's law dictionary

  • criminal instrumentality rule — Where the wrong is accomplished by a crime, the crime and not the negligent act of the party which made it possible is the proximate cause . Foutch v. Alexandria Bank & Trust Co., 177 Tenn. 348, 149 S.W.2d 76, 85 …   Black's law dictionary

  • criminal instrumentality rule — Where the wrong is accomplished by a crime, the crime and not the negligent act of the party which made it possible is the proximate cause . Foutch v. Alexandria Bank & Trust Co., 177 Tenn. 348, 149 S.W.2d 76, 85 …   Black's law dictionary

  • alter ego rule — See instrumentality rule …   Black's law dictionary

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  • SEC Rule 10b-5 — is one of the most important rules promulgated by the U.S. Securities and Exchange Commission, pursuant to its authority granted under the Securities Exchange Act of 1934. The rule prohibits any act or omission resulting in fraud or deceit in… …   Wikipedia

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