What is meant by the corporate veil?

The corporate veil is a legal concept that refers to the protection provided to business owners from personal liability for the debts or other obligations of the business. In other words, it is the invisible barrier that separates the owners from the business. In Missouri, the corporate veil is established by incorporating a business in accordance with the state’s business formation law. By forming a corporation, the owners are separated from the business and thereby insulated from personal liability for the business’s obligations. This means that if the business fails, creditors cannot pursue the owners’ personal assets to satisfy the debts of the business. The protection of the corporate veil also applies if a business is sued. In such a case, the owners’ assets remain out of reach if the business is liable for damages. The corporate veil also shields owners from personal liability for the wrongful acts of their employees, unless the owners can be proven to have been negligent in managing the business. This legal protection serves to encourage entrepreneurs to form corporations, by protecting them from risk and giving them the confidence they need to pursue business ventures.

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What is meant by the corporate veil?

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