Tue, Jun. 06, 2006

Holding Members Liable

CK - Washington.   Members of certain associations are not liable for the debts of the entity but the Dresden Court of Appeals found an exception. Münster attorney and non-profits expert Gunnar Pietsch discusses in detail the rules that the court applied to an association engaged in business operations.

The bottomline is that members pay if the assocation can't and the members had an opportunity to prevent management from using the association for for-profit purposes. As Pietsch writes, Piercing the Veil of Associations will be possible. Conversely, extra caution is suggested when using a non-profit entity.


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