0

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.

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

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?

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?

  • If you don't have a distinct part of your house dedicated to your work, you can't take a home office deduction on your personal income tax. But that doesn't imply that you are personally liable for the corporation's liabilities. – phoog Jul 31 '18 at 22:25
1

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.

1

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.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.