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SESK: Stuff Everyone Should Know · sesk.info/biz-veil-commingling

In most states, which habit can lead a court to pierce the corporate veil?

Mixing personal and business money, called commingling.

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  1. Keeping a separate business bank account
  2. Mixing personal and business money ✔
  3. Filing annual reports on time

Why: In most states, courts may consider misconduct such as mixing personal and corporate assets or forming an undercapitalized company. Keeping business money separate helps preserve limited liability.

Huh, didn't know that: In most states, forming a company with far too little capital for expected obligations can also weigh in favor of veil piercing.

The dad joke
I keep my business money and my lunch money apart. They don't even make eye contact.
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References

Answer: Mixing personal and business money. In most states, courts may consider misconduct such as mixing personal and corporate assets or forming an undercapitalized company. Keeping business money separate helps preserve limited liability.

  1. Cornell LII Wex: piercing the corporate veil www.law.cornell.edu/wex/piercing_the_corporate_veil
    misconduct may include abusing the corporation (e.g. intermingling of personal and corporate assets ) or having undercapatitalization at the time of incorporation
    Checked 2026-10-11.

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