What is "Piercing the Corporate Veil?"

What is “Piercing the Corporate Veil?”

What is "Piercing the Corporate Veil?"

How Do I Protect my San Diego Business?

What is the “corporate veil” and what does it mean when a creditor or attorney talks about “piercing the corporate veil?”  When you formed your LLC or Corporation you did so to separate your personal assets and accounts (such as your home, your personal bank accounts and investments) from your business.  The creation of a Limited Liability Corporation or LLC, or the incorporation of an S-Corporation or C-Corporation provides the protection of a corporate entity, in other words, a corporate “veil” that protects you personally from liabilities that arise during the course of conducting business.  The corporate veil ensures that creditors can only come after the business and its accounts and assets if a dispute arises.

Creditors and adversaries in lawsuits want access to every asset you personally have, including the equity in your home and all your money.  These are protected by the LLC or corporation.  Creditors will want to “pierce the corporate veil” so that they can access your personal assets and resources to pay off debts and liabilities generated by the business.  If you own or are a member or shareholder in an LLC or Corporation there are steps you must take to protect your company, to ensure that an adversary cannot pierce the corporate veil.

What Steps Must I Take to Protect Our LLC or Corporation?

The experienced attorneys at the Watkins Firm have helped San Diego LLCs and corporations to protect the corporate veil for decades.  There are actions you must take on a regular basis, and we will advise you on timeframes for meeting these requirements and the legal obligations for maintaining the protections of the corporate veil.  The laws are more defined and strict for Corporations than they are for LLCs but both business entities must fulfill all requirements throughout the business year.  Talk to our seasoned business lawyers to understand the specific requirements for your company.

There are additional actions you can take to protect your company including:

  1. Never “commingle” business and personal assets and funds. Have separate checking and savings accounts for your company, and use a company check or credit card to pay all invoices. Ensure all invoices are made out to your company, not you personally.
  2. Ensure that your company is “publicly known.” Print business cards. Send invoices to your clients in your company’s name. Ensure all checks and payments are made to your company, not to you personally. Have all associated contracts in your company’s name and sign them as an officer of the company.
  3. File all required State and Federal forms, pay required fees and obtain mandated permits and licenses.

Don’t Allow a Judge or Creditor to Pierce the Corporate Veil of Your San Diego Business

Prevent creditors and parties to lawsuits from piercing the corporate veil of your LLC or corporation to gain access to your personal assets and wealth.  Contact us to schedule an appointment, or call us at 858-535-1511 for a free consultation to discuss your business and how you can prevent an opportunity to pierce the corporate veil and expose your personal assets and accounts.  We will help you to protect your company, and provide the sound advice and counsel that will help your business to grow and thrive.

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Contact a Business Law Or Real Estate Attorney Today

To set up a free, no-obligation consultation with one of our knowledgeable San Diego business lawyers, call us at 858-535-1511 or contact us online.


9915 Mira Mesa Blvd., Suite 130
San Diego, CA 92131

Telephone: (858) 535-1511
Fax: (858) 535-1581