In business litigation, securing a judgment is only half the battle. Collecting on that judgment – especially when the liable party hides behind a corporate entity – can be significantly more difficult. Fortunately, California law offers a powerful tool: piercing the corporate veil.
At the Boesch Law Group, we have successfully pierced the corporate veil in complex business disputes, holding individual owners personally accountable when they misuse the corporate structure to avoid liability. We also defend business owners against improper alter ego claims when their company is operating legitimately.
What Does It Mean to Pierce the Corporate Veil?
Under normal circumstances, a corporation or LLC protects its owners and shareholders from personal liability. But when that entity is used to commit fraud, avoid obligations, or otherwise abuse the corporate form, courts can disregard it – holding the individuals behind the company directly liable.
This legal doctrine, known as “alter ego liability,” plays a critical role in enforcing judgments and ensuring fairness in the business arena.
Common Grounds for Veil Piercing in Business Litigation:
- Commingling funds: Business and personal finances are used interchangeably
- Undercapitalization: The business was never properly funded to meet its obligations
- Failure to follow corporate formalities: No records, no meetings, no separation from personal affairs
- Misrepresentation or fraud: Using the entity to deceive creditors, partners, or customers
- Improper asset transfers: Moving company assets to related parties to avoid liability
Real-World Impact: Enforcing Judgments Beyond the Entity
At the Boesch Law Group, we’ve successfully enforced judgments by going beyond the corporate entity when justice required it. In one such case, the judgment debtor – a corporate entity – had ceased operations and was essentially hollow. Through post-judgment discovery and a motion to amend the judgment, we demonstrated that the individual behind the entity had diverted company assets for personal use on more than 60 occasions. These included direct transfers to personal accounts and payments of personal expenses using company funds.
Although the underlying dispute involved a construction business, the remedy was procedural, not industry-specific: the objective was to reach the real defendant. The court agreed that failing to hold the individual accountable would produce an unjust and inequitable result and granted our motion to amend the judgment. Shortly thereafter, the judgment was satisfied in full.
How We Help Creditors and Judgment Holders: We investigate suspicious business structures, subpoena related entities, and work to uncover hidden assets. When appropriate, we pursue alter ego claims to ensure responsible parties are held accountable.
How We Help Business Owners: We defend against unjustified veil-piercing efforts and help businesses maintain proper governance, protecting personal assets and reinforcing the legitimacy of the entity.
Why Experience Matters
Veil piercing is not automatic – it requires a fact-intensive legal showing. Courts are reluctant to set aside corporate protections without a strong, well-supported case. At the Boesch Law Group, we know what courts look for, and we know how to build compelling arguments for both plaintiffs and defendants.
If you’re dealing with a business dispute where the corporate form is being abused – or being challenged – contact the experienced litigation team at the Boesch Law Group today for a free consultation. We’ll help you enforce your rights and protect what’s yours.