Incorporation & Corporate

Corporate Veil

Also called: Piercing the Corporate Veil, Limited Liability

The legal separation between a corporation and the people who own or run it.

Because a corporation is its own legal person, its debts are generally not the personal debts of its shareholders. Courts will occasionally "pierce the veil" where the corporation was used to commit fraud or as a mere facade, but in Canada this is uncommon and narrowly applied.

Why it matters: the veil is often weakened voluntarily — by personally guaranteeing a lease or loan, which puts personal assets directly at risk regardless of incorporation.

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Corporate Veil — Canadian legal glossary | Lawkin — Lawkin