T-Minus 2

Piercing the Corporate Veil - As a general rule, shareholders are not liable for the debts of the corporation. An exception arises in the case of closely held corporations, and it may be possible for a creditor to pierce the veil. To do so, the creditor must first show an abuse of corporate privileges, and second, that it would be fundamentally fair to hold the shareholder personally liable. This often arises in two situations - alter ego and undercapitalization. Please note that courts are more willing to pierce the veil for tort creditors rather than contract creditors.