Piercing the Corporate Veil

Cite this article as:"Piercing the Corporate Veil," in The Business Professor, updated June 26, 2014, last accessed October 20, 2020, https://thebusinessprofessor.com/lesson/piercing-the-corporate-veil/.
Video Thumbnail

Piercing the Corporate Veil

https://youtu.be/N97ifFaxjt0 Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP Piercing the Corporate Veil When courts find that the corporate organization is being misused, then the corporate entity can be disregarded. Basically, the shareholders lose the limited liability protectio

Cite this article as:"Piercing the Corporate Veil," in The Business Professor, updated June 26, 2014, last accessed October 20, 2020, https://thebusinessprofessor.com/lesson/piercing-the-corporate-veil/.

Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP

Piercing the Corporate Veil

  • When courts find that the corporate organization is being misused, then the corporate entity can be disregarded.
  • Basically, the shareholders lose the limited liability protection and the shareholders are treated like partners.

o   Alter-Ego Theory

  • This is theory or justification for piercing the corporate veil.
  • If the corporate officials disregard the corporate entity and act the manner of a partnership, then there is no unity of ownership and interest.
    • Therefore the corporation ceases to exist.

Was this article helpful?