What is meant by pearcing the copporate veil?

Question

In corporate Law what is Meant by pearcing the corporate veil?

Answer 1

A corporation is considered under the law to be a separate legal "person." That means the shareholders' individual assets can't be taken if the corporation is sued. In other words, they are hiding behind the "veil" of safety that the corporation provides.

To maintain this fiction, the corporation must maintain records which are separate from the shareholders, such as keeping separate bank accounts and holding monthly meetings. They can't treat corporate property as their own. If the corporation's property is intermingled with shareholder property too much, the courts can declare that the corporation is a sham, and treat shareholder property the same as corporate property. That is called "piercing the corporate veil."