Corporate glossary
What is piercing the corporate veil
Piercing the corporate veil is the unenforceability of legal personality: when the company is used to violate the law, public order or good faith, or to frustrate the rights of third parties, the conduct is attributed to the partners or controllers (art. 54).
What is piercing the corporate veil
It is an exceptional remedy of restrictive interpretation: it is not enough that the company is insolvent nor that there is a single partner behind it; the deviated use of the corporate form must be proven.
Properly applied, it reaches partners and controllers —including whoever controls without being a formal partner—, who are jointly and unlimitedly liable for the damages.
Distinctions often confused
Unenforceability (veil) is not the same as Nullity of the company. Unenforceability sets the company aside for that abusive act, without annulling it; the company continues to exist for everything else.
An informational definition; it does not constitute legal advice nor replace professional consultation.
Do you need advice on this matter?
The firm is headquartered in Buenos Aires, Argentina, and advises clients worldwide.
Contact the firm