united-states business corporate-law
Is doing business where you live all it takes to pierce the corporate veil?
<p>If an LLC operates from someone's home, I read (can't find source at the moment) that they want a place in their home where they exclusively work on the business (like a home office) to keep business and their personal lives separate.</p>

<p>If they don't do this and do business work from the kitchen, say, they are at risk of piercing the corporate veil.</p>

<p>Is this really all it takes to pierce the corporate veil? Assuming that all the other corporate formalities are in place, can I safely work from the living room, for example?</p>

<p>On a related note, if I get sued, will I have to prove that the place where I work is separate from where I hang out?</p>

<p>The corporate veil cannot be pierced simply because you work from home, so long as you do not co-mingle entity and personal assets and expenses.</p>

<p>It would help to know what jurisdiction you're in, but I don't know of any jurisdiction in America where this would be sufficient to pierce the veil. You'd need to have quite a bit more than a home office to justify that kind of action -- commingling of personal and business funds, personal use of business assets, etc.</p>

<p>Assume that I let some limited liability corporation, not related to me, not owned by me, use my home (for some payment probably). This doesn't give any third party access to me home, except for example if police had a search warrant against the company that allows them to enter their business premises, that would likely allow them to enter my home and search whatever was used for the business. But they can't touch my property.</p>
<p>In case of bankruptcy, debtors may have rights to things owned by the company. That doesn't give them rights to my property (if I rented to a third party LLC). The only problem is that it might not be clear what is my property, and what is property of the LLC. You'd have to convince a court that something belongs to the LLC in order to be able to get it if the LLC owes you money.</p>
<p>&quot;Piercing the corporate veil&quot; means that the protections a LLC gives its owners are gone. They are not. It just means I put myself at risk that personal property of mine is <em>claimed</em> to be owned by the company.</p>
