Nolo's Plain-English Law Dictionary

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Piercing The Veil: A judicial doctrine that allows a plaintiff to hold otherwise immune corporate shareholders personally liable for the debts of or damages caused by a corporation under their control. The corporate veil can be pierced when shareholders have acted intentionally and illegally, when the corporation has neglected corporate formalities, and/or when the corporation is found to be a mere alter ego of the shareholders (a shield set up to defraud creditors). This doctrine applies to limited liability companies as well. Also known as disregarding the corporate entity.