Entities
Piercing the corporate veil
Piercing the corporate veil is when a court disregards a company's separate legal existence and holds its owners personally liable for its debts. Courts do this where owners have treated the company as an extension of themselves, most commonly by mixing personal and business finances.
In plain terms: When a court decides your company was never really separate from you, and comes after you personally.
Why it matters
This is the concrete risk behind every piece of advice about keeping business and personal money apart. The behaviours that invite it are mundane: paying personal bills from the business account, no operating agreement, no records, chronic undercapitalisation, letting filings lapse.
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