Piercing All the Veils: Applying an Established Doctrine to a New Business Order

Abstract:     
"Piercing the corporate veil" (piercing) has a long, if controversial, history in the law of business. It allows creditors of such an entity to disregard the limited liability normally given its shareholders and hold them personally answerable for the debts of the enterprise. The remedy arose as a counterbalance to the asset shield normally afforded corporate investors, and it is closely tied to important issues involving the accountability and social responsibility of business.

In the last decade, this special protection - at first only given to corporate shareholders - has been extended to investors in two new business entities, the limited liability company (LLC) and the limited liability partnership (LLP). Consequently, concerns have been expressed about whether the piercing doctrine should be applied to those companies and, if so, how it should affect their liability shields.

Number of Pages in PDF File: 35

JEL Classification: K22

Accepted Paper Series