Piercing the Corporate Veil in Florida: When Can the People Behind the Company BE SUED?

Author: Lindsay A. Compton

Date: February 6, 2026 


One of the primary reasons people form corporations and limited liability companies is simple: to avoid personal liability. In most cases, that protection works exactly as intended.

But not always.

In limited circumstances, Florida courts may allow a plaintiff to “pierce the corporate veil” and hold the individuals behind a business personally responsible for the company’s debts or misconduct.


The General Rule: You Sue the Company, Not the People
As a general rule, when an individual has a dispute against a corporation or LLC your claim is against the company itself, not its owners, members, officers, or directors.

That separation is the entire point of forming a business entity. When respected, it protects individuals from being personally sued for company obligations, even when the business falls short on its promises or acts in a careless manner.


The Exception: Piercing the Corporate Veil
Piercing the corporate veil is an equitable remedy that allows a court to disregard the business entity’s general protection and impose personal liability on its shareholders, members, or directors.

Florida courts are reluctant to do this. Veil-piercing is considered an extraordinary remedy and requires evidence that the business entity was used for fraud, improper conduct, or merely as the owner’s “alter ego.”

Simply owning or managing a company, even poorly, is not enough.


What Must Be Proven to Pierce the Veil in Florida
To successfully pierce the corporate veil, a plaintiff generally must prove all of the following:

1. Complete Domination and Control
The individual exercised such complete control over the entity that it had no independent existence, functioning solely as the owner’s alter ego. This means the individual treated the company as an extension of themselves rather than as a separate legal entity. The owner made all decisions without regard to corporate governance, ignored required formalities, and used the company’s assets and accounts for personal purposes. In practice, the business did not operate independently, but instead existed solely to carry out the owner’s personal objectives, with no meaningful separation between the individual and the entity.

2. Improper Purpose
The corporate form was used to commit fraud, misrepresentation, or other improper or illegal conduct. Ordinary breach of contract or business failure is not sufficient to meet the burden of “improper purpose” in order to pierce the veil.

3. Proximate Cause
The misuse of the corporate form directly caused the plaintiff’s injury or loss.

Without proof of all three elements, Florida courts will not pierce the veil. 


Factors Florida Courts Commonly Consider
Courts often look consider the overall conduct of the business and its owners hen considering the elements needed to pierce the veil, including:

• Commingling of Funds: Mixing personal and business assets or using company accounts for personal expenses.

• Disregarding Corporate Formalities: Failing to maintain corporate records, minutes, operating agreements, or separate bank accounts.

• Undercapitalization: While undercapitalization alone is not enough, significant underfunding combined with other misconduct may support a veil-piercing claim.

No single factor is dispositive, the analysis is fact-specific and highly dependent on evidence.


Why Veil-Piercing Claims Are Difficult
Veil-piercing claims are hard to prove, expensive to litigate, and often misunderstood. Florida courts consistently emphasize that limited liability should be preserved unless there is clear abuse of the corporate form.

For that reason, these claims require careful evaluation before pursuing litigation.


How Compton Law, P.A. Can Help
At Compton Law, P.A., we help clients evaluate whether a veil-piercing claim is legally viable and financially practical. We also advise business owners on how to properly maintain corporate protections to avoid personal exposure.

If you are considering litigation against a business, or want to protect yourself from personal liability, contact Compton Law, P.A. at (239) 268-4114 or use the link below to schedule a consultation and discuss your options.