If you were an officer, director, and/or shareholder of a small corporation, what are some examples of steps you would take to minimize the risk of having the corporate veil pierced for your business?
The corporation is said to be like a veil that shields its shareholders from corporate debts and other similar obligations. One of the biggest advantages to incorporating a business is that it enjoy broad protection from being held personally responsible for the debts and liabilities of the corporation. That is, creditors can reach the corporation's assets, but once those assets are exhausted they cannot ordinarily also reach the personal assets of the owners or shareholders of the corporation. Under some circumstances, those to whom the corporation is liable will attempt to "pierce the corporate veil", the legal term used to describe an action to have the corporation set aside for purposes of the litigation such that personal liability attaches, and personal assets can be reached. The general rule is that the corporate entity protects the shareholders from liability beyond their investments.
For instance, if a judgment is entered against a corporation, its shareholders ...
This helps in explaining the Concept of piercing the corporate veil of limited liability