Pierce The Corporate Veil Legal Meaning and Definition

Here is a simplified definition of the legal term Pierce The Corporate Veil.

Pierce The Corporate Veil (verb)

"Pierce The Corporate Veil" is a legal action that challenges or ignores the protection that a corporate structure provides to its shareholders. Typically, shareholders have "limited liability," meaning they are not personally responsible for the company's debts or legal problems. But if a court decides to "pierce the corporate veil," it means shareholders can be held liable for the corporation's actions or debts, despite the usual protections. This usually happens when the court believes the company was not operated as a separate entity from its shareholders or was used for wrongdoing.