Corporate Veil

The corporate veil is a legal concept that separates a company's identity from its owners, protecting them from personal liability for the company's debts and actions. When a corporation is formed, it becomes a distinct legal entity, meaning creditors typically cannot go after the personal assets of shareholders or directors. However, in certain situations, courts can "pierce the corporate veil" if the company is misused, such as committing fraud or failing to follow legal requirements, holding individuals personally accountable. This protects business owners while also ensuring businesses operate responsibly.