The doctrine requires unity of interest such that separate personalities no longer exist, and that observing the form would sanction fraud or promote injustice. Factors include undercapitalization, commingling, and disregard of formalities.
Standards vary substantially and success is uncommon.
Alternative Names:
Piercing the Corporate Veil|Veil Piercing
Why it Matters?
Multiple factors in combination are required, and undercapitalization or informality alone rarely suffices, which means discovery into intercompany transactions, corporate records, and financial flows determines whether the theory is viable. Reverse veil piercing reaching entity assets for individual obligations is recognized in some jurisdictions and rejected in others. Judgment collection is the usual context rather than initial pleading.
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Frequently asked questions
What does the theory require?
When is the theory typically raised?
