SESK: Stuff Everyone Should Know · sesk.info/biz-veil-piercing
What does "piercing the corporate veil" mean?
A court holds owners personally liable, setting aside limited liability.
- A court makes owners personally liable ✔
- Selling shares to the public
- Changing the company's legal name
Why: Piercing the veil is when a court sets aside limited liability and holds shareholders or directors personally liable for the company's debts. Courts usually do it only after serious misconduct.
Huh, didn't know that: Courts generally begin with a strong presumption against piercing the corporate veil.
Why did the corporation repair its curtain? It wanted to keep the veil intact.
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References
Answer: A court makes owners personally liable. Piercing the veil is when a court sets aside limited liability and holds shareholders or directors personally liable for the company's debts. Courts usually do it only after serious misconduct.
- Cornell LII Wex: piercing the corporate veil www.law.cornell.edu/wex/piercing_the_corporate_veil
personally liable for the corporation’s actions or debts
Checked 2026-10-11.
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