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Behind the Mask

When the corporation doesn't protect its owner

By Jane Easter Bahls

Opinions expressed by Entrepreneur contributors are their own.

Suppose a small corporation owes you money, won't pay, andyou suspect the corporate form is just a sham to protect the ownersfrom having to pay out of their own pockets. Can you get your moneyout of the owners?

While it's still fairly rare, courts are sometimes willingto "pierce the corporate veil," holding owners personallyliable for the debts of the corporation. Two situations especiallysmack of fraud or injustice sufficient for a court to disregard thecorporate entity.

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