As an Atlanta business litigation attorney, one issue that comes up frequently when I am involved in a lawsuit for or against a corporation or other legal entity is how can the corporate entity be disregarded to subject the officers and directors to suit—otherwise known in Georgia as piercing the corporate veil. One of the main ways is a showing of illegality, fraud or misrepresentation on the part of the officers and directors regarding the subject matter of the lawsuit.

Instances where courts often pierce the corporate veil are when corporations, officers and directors are actively evading a contract or tort obligation, taxes, trying to delay, hinder or defraud creditors and where it can be shown that they are trying to perpetrate a fraud or other injustice by hiding behind the corporate veil.

It is important to keep the concept of piercing the corporate veil in mind both when either beginning the process of filing a lawsuit or defending against one.