What does piercing the corporate veil mean on the CPA exam?
Piercing the corporate veil. A court setting aside limited liability and reaching the owners personally, typically where the entity was undercapitalized, its formalities ignored, or its funds mixed with the owner's.
Which CPA exam sections use piercing the corporate veil?
Piercing the corporate veil appears in the REG section of the CPA exam.
Related terms
- capitalize: To record a cost as an asset and spread it over the periods it benefits, rather than expensing it immediately.
- limited partnership: A partnership with at least one general partner who manages and is personally liable, and limited partners who invest without personal liability or control.
- balance sheet: A snapshot at one date of what the entity owns, what it owes, and the owners' residual.