“Piercing the corporate veil” refers to a situation in which courts put aside limited liability and hold a corporation’s shareholders or directors personally liable for the corporation’s actions or debts. Veil piercing is most common in close corporations.
Subsequently, what is piercing the corporate veil Why is it important?
If a court pierces a company’s corporate veil, the owners, shareholders, or members of a corporation or LLC can be held personally liable for corporate debts. This means creditors can go after the owners’ home, bank account, investments, and other assets to satisfy the corporate debt.
In this regard, is it hard to pierce the corporate veil? This legal structure creates an entity separate from the individual. … It is expensive and difficult to pierce the corporate veil and get a judgment against the individual behind the company.
