09/28/2026
Most Arizona business owners form an LLC or corporation specifically to keep their personal assets, like their home, car, and savings, separate from business debts and lawsuits. That protection isn’t automatic, though. In certain circumstances, a court can disregard the business entity altogether and hold an owner personally responsible for the company’s obligations. This is known as piercing the corporate veil, and understanding when it applies is one of the most important things a business owner in Arizona can do to protect what they’ve built.
What Does “Piercing the Corporate Veil” Mean?
When you form a properly structured LLC or corporation, the law treats the business as its own legal “person,” separate from you. That separation is what shields your personal assets from business creditors and lawsuits. Piercing the corporate veil is the legal process by which a court sets that separation aside and allows a creditor or plaintiff to reach an owner’s personal assets directly.
Most Arizona business owners form an LLC or corporation specifically to keep their personal assets, like their home, car, and savings, separate from business de