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What Is a Corporate Veil?

Written by: Jon Mitchell Jackson

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The Corporate Veil: an Accepted Way to Protect Your Personal Assets

Generally speaking, the corporate veil is a legal shield protecting owners, operators, management, employees and shareholders from personal liability. And because corporations are generally accepted in the business world, corporations are a convenient entity to use. The corporation is often recommended as the entity of choice whenever a business has employees.

The Law Separates a Corporation from the Individual

Because of the corporate veil, a corporation is traditionally the first line of defense in any asset protection strategy because of the long record of statutory and case law that supports a corporate veil and related goals of achieving limited liability. This liability protection is available because of the way the law separates the corporation from any associated individual.

The Entity of Choice

Because of the presence of the corporate veil, the corporation is often recommended as the entity of choice whenever a business has employees. Limited liability companies also offer the safety of a corporate veil.