To The Moon

author: Dustin Wetton

After a nice relaxing weekend, its good to be back to work. This week is planned with networking events at local entrepreneur and business owner network groups throughout the county, as well as meetings between our lawyers with other lawyers in the community to build upon our marketing techniques. Things are still changing here at Laurus Law Group, but its nice to see it all coming together nicely.

This blog is centered on the moon. I was listening to NPR radio on my way home one night and heard on their program “Things You Should Know” the interesting effects of the moon. The so-called "moon illusion" or "moon effect" has been discussed by many people over since our beginnings. Even Aristotle mentions it in 350 BCE. The illusion or effect is the change in the moon size when it is near the horizon compared to when it is high in the sky. There are many memories that I have looking at the full moon rising over a lake or between mountain passes and being amazed by its immensity, as I am sure you all have many similar memories. According to the radio program, some people judge the moon to be as much as twice as large, but the average estimate is 50% to 75% larger. The best part of this change in size of the moon is that no one knows why it happens. Scientists have agreed, to my great disappointment, that the moon is not changing in size every night as it passes from horizon to zenith. But they really cannot explain why our perception of the moon changes.

This illusion is very amusing to me. The moon is the moon, by definition. Its size is constant, at least mostly constant, but to our eyes it fluctuates on a daily basis. It makes me think of philosophical topics such as relativism and absolutes. It also makes me think of the myths and beliefs of perceptions. While the public at large may believe one thing to be true based on perception, the truth of a situation may be hiding behind this perceived belief. And thus, I segue into the Alter-Ego theory.

The alter-ego theory is a theory based upon a business entity being created in order to hide the owners from liability, yet its only purpose is to serve as the “alter-ego” of the owners. Therefore, to tie it to the moon, the perception of a business and holding itself out to be a business is only a façade, and the truth is that the business is just a mask for the owner to try and hide behind. When an alter-ego is found, the protections afforded to certain entities are vanished and the owners can be attacked personally for any liabilities of their business. Of course the alter-ego can be found when owners are caught to purposefully be hiding behind their business as a fraud, but there are even simpler, more innocent, ways of being found as an alter-ego business. When a business is not operating as a business, courts have found that the business is not truly a business, but is instead an alter-ego. Acting like a business is ensuring that all letterheads match, that monthly board meetings are met and minutes are taken, that correct voting at all meetings are conducted properly, that papers are recorded and organized properly. While each of these, and many other tasks, may seem minute on an annual basis, these tasks are what courts look to and litigators try to find when the alter-ego theory is being used as a weapon. Thus, governing your business properly on a daily basis is a necessity. To be sure that your business is run properly, it is often a good idea to hire an attorney to check annually, semi-annually, or quarterly that all of your business is being run properly.

In sum, the moon may look like its wavering between sizes and a business may seem to be operating as a business, yet the truth of both cases is that their perceptions do not always hold up to the truths operating behind the myths.

If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com