"Piercing the corporate veil" is a legal phrase that describes the owners of a corporation losing the limited liability that having a corporation provides them. When this happens, the owners’ personal assets can be used to satisfy business debts and liabilities. This concept doesn’t apply only to corporations, however. Any business type that provides limited liability to its owners is at risk of piercing the corporate veil if the owners don’t take the steps necessary to ensure this protection remains intact.

In order to incorporate a business, you must file company formation documents with the state government. Unlike a sole proprietorship or general partnership, both of which are formed as soon as the owner or owners conduct business, a corporation or LLC must be created with the state, and each state has its own incorporation requirements. This article outlines the most commonly requested elements.

When starting a business or changing your business structure, one of the most common options business owners evaluate is whether to form an S corporation (S corp) or C corporation (C corp). These are the two most common ways to incorporate, and the choice really depends on your business goals.