Veil Piercing

Veil piercing is a legal concept that allows courts to hold the owners or shareholders of a corporation personally responsible for its debts or liabilities. Normally, a corporation is seen as a separate legal entity, protecting its owners from personal liability. However, if the corporation is used for fraudulent purposes, commingled funds, or lacks proper separation from its owners, courts may "pierce the corporate veil" and impose personal responsibility. This ensures that individuals cannot hide behind the company's protections to avoid obligations or engage in wrongful conduct.