Complex Commercial Litigation
Entity and Structure Issues
Veil piercing disregards corporate separateness where the entity was used to perpetrate fraud or injustice. Courts typically examine undercapitalization, commingling of funds, failure to observe corporate formalities, domination by an owner, and use of the entity as a mere instrumentality.
It is an equitable remedy applied sparingly rather than a cause of action in itself.
Alternative Names:
Veil Piercing, Disregarding the Corporate Entity
Why it Matters?
Veil piercing is the response to judgment-proof defendants and to structures designed to isolate assets from operating risk, which is common in transportation, construction, and long-term care. The factors are multi-part and fact-intensive, so these claims rarely resolve on the pleadings and instead drive discovery into intercompany transfers, capitalization, and governance. Alter ego and single business enterprise theories serve similar functions with different formulations.
Frequently Confused with
Related terms
Frequently asked questions
What factors do courts consider?
Is veil piercing a separate cause of action?
