Kim Lisa TaylorSecurities Attorney, Founder, Syndication Attorneys, PLLC · Corporate Securities Attorney, 2x Best-Selling Author, Nationwide Speaker | Private Placement

How to Safeguard Your Business: Piercing the Corporate Veil

24 Jun 2024 · 1 min

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In this segment, the speaker explains that many legal tactics exist to pierce a corporate veil, but Wyoming introduced stronger veil‑protection statutes about three to four years ago, setting it apart from other states. To mitigate the risk of veil‑piercing for single‑member LLCs, lawyers often advise adding a spouse or child as a nominal member, even with a tiny ownership stake, so the owner is not the sole person in the company. The recent Wyoming reforms have spurred a noticeable increase in entrepreneurs forming entities there, attracted by the added legal shield.

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But there are a lot of ways legally for someone to pierce that corporate veil. So that's, you know, before Wyoming gave that protection, because that only happened a few years ago, maybe about 3 or 4 years ago, Wyoming changed to have that protection. Before that, they were just like every other state. And so what a lot of lawyers would recommend is, okay, if you're going to be a single member, you may want to add like your spouse or a, one of your children as a member of the company, even if it's a small percentage. So then that way you're not the only person in that company, making it more difficult to pierce the corporate veil. But now that Wyoming has that protection, that's why you see more people flocking to them.