Walkovsky v. Carlton

Defendant operated a fleet of cabs. The operation had ten different corporate entities, which were organized to shield the entire operation from liability.

"The law permits the incorporation of a business for the very purpose of enabling its proprietors to escape personal liability . . . but . . . the courts will disregard the corporate form, or, to use accepted terminology, 'pierce the corporate veil,' whenever necessary 'to prevent fraud or achieve equity' . . . ." Three takeaways: (1) You are allowed to setup complex corporations to cabin liability; (2) in order to get courts to respect the corporate entities, go through the motions of formalities; and (3) the distinction between veil piercing and enterprise liability is that enterprise liability - there is nothing wrong with one corporation being part of a larger corporate enterprise.

Corporate Formation & Form | Veil Piercing