I have heard of something called piercing the corporate veil – what is it exactly and am I at risk?
Basically, piercing the corporate veil is a way that Corporations or LLC’s can loose the liability protection for their owners. Under principles of corporate law a valid incorporation results in the formation of a separate and distinct entity apart from its shareholders. The corporation retains a separate legal identity and is responsible for all of its legal, business and economic activities, and obligations. In this manner shareholders are shielded by the “veil” of the corporation and cannot be held personally liable for the activities and obligations of that corporation. This protection is a means of promoting economic development and protecting corporate employees from actions and debts of the corporations. However, there are instances where this protection can be set-aside and shareholders of a corporation can become personally liable for corporations actions. This doctrine is called piercing the corporate veil. Under Colorado Law, in the absence of some exception, neither the off
