01/04/2012

Piercing the LLC Veil

Many of my clients utilize LLC's in order to shield assets from liability.  However, in a recent California case, the court found that an owner of an LLC must maintain "separateness" between the LLC and himself as owner.

In this California case, a lender obtained a jusgement against a defaulting LLC.  The court allowed the lender to "pierce the veil", which means that the LLC owner was not afforded the protection of the LLC and his other assets were not immune to the judgment.  This case emphasizes the importance of maintaining "separateness" between the LLC and its owner(s).