Each registered corporate entity exists as an individual in the eyes of the law. The separation of two corporations within one larger business, even when the corporate officers are the same people, are separated by what is often called a "veil". It describes the principal of protecting each corporate entity from liability of the other and related differentiations.
One of the biggest advantages to incorporating a business is liability protection. Forming a corporation, limited liability or similar entity forms what is called a “corporate veil,” a division between an entity and the personal assets of the shareholders of a corporation.
corporate veil FYI: The Bank Bond note holders of WMB the “bank” that FDIC took control of and gave to JPM. Now they want WMI the holding company to pay for those liabilities. They are trying to pierce that veil or corporate shield. Our judge needs to throw all the bank bondholders out the door, but Rosen/Weils wishes to keep those claim in to keep Equity out of the money. It is a game the examiner I hope brings up and fine time for this judge to act on it. Definition Legal concept that separates the personality of a corporation from the personalities of its stockholders (shareholders), and protects them from being personally liable for the firm's debts and other obligations. This protection, however, is not ironclad or impenetrable. Where a court determines that a firm's business was not conducted in accordance with the provisions of corporate-legislation (or that it was just a façade for illegal activities) it may hold the stockholders personally liable for the firm's obligations under the legal concept of 'lifting (or piercing) the corporate veil.'
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