What does it mean to "pierce the corporate veil"?

Answer by  patti (29325)

It is a metaphor: corporations are "protected" by an invisible veil, if you will. "Piercing" that veil exposes some aspect of the business previously unseen.

Answer by  patti (29325)

"Veil" implies that there are things that go on that are not transparent or "visible" to everyone, that there is a bit of mystery to which only insiders are privy. "Piercing the veil" means that the "mystery" is exposed to the public.

Answer by  JES1458 (39)

In US corporate law, the general rule is that the shareholders of a corporation are not liable for its debts or actions. There are exceptions to this general rule and when those exceptions apply, it is sometimes described as piercing the corporate veil. Most of these situations arise where the corporation is used to conduct fraud or illegal activity.

Answer by  patti (29325)

The corporate veil is an imaginary protection afforded those who work at the upper level of corporate management/ownership. "Piercing" that "veil" means that individuals are exposed for their actions and are not exclusively protected by the cover of business.

Answer by  nuttree (1596)

In general, a corporation is a legal entity that is treated legally as a person, and its owners are not personally responsible for what it does. A court "pierces the corporate veil" when it looks beyond that entity and holds the managers or owners responsible for the corporation's actions.