Piercing the Corporate Veil Checklist: Avoid Mistakes and Exposure

Avoid piercing the corporate veil with these tests and due diligence checklists.

Corporations or other limited liability entities are used to shield unrelated assets from liability. The entity veil describes the separation of a business entity from its owners and assets. In limited circumstances, courts will pierce the entity veil and hold an entity's owners liable for the obligations of a business entity. Courts have traditionally been loose with the terminology surrounding the analysis of veil piercing claims. This topic will isolate the essential factors that courts have considered important enough to merit the application of an extraordinary remedy. We will delve into the differences between piercing the entity veil and piercing the entity veil of a limited liability company or other forms of limited liability entities. This topic will address other factors such as jurisdiction and forum selection. Lastly, the material will cover formation and ongoing operational considerations appropriate for a large corporation, a closely held business, or an individual.