One of the bedrock principles of business law is limited liability.
The individual owners of an entity – shareholders of a corporation or members of a limited liability company – cannot be held personally liable for the debts or liabilities of the entity. But the doctrine is not absolute. There are many common law fact patterns that allow courts to pierce the entity veil – co-mingling of funds, using an entity as an alter ego, among others – and reach an individual person's assets.
There are also several sources of statutory authority allowing veil piercing.
This program provides a practical guide to common law, equitable, and statutory theories of piercing entity veils.
- Statutory and equitable principles to pierce the entity veil
- Fact pattern justifying piercing limited liability to reach an owner's personal assets
- Statutory sources permitting breaching the entity veil
- Application of veil piercing to non-corporate entities
- Liability for improper distributions
- Piercing for withheld income and employment taxes, and sales/use taxes