Few things are as American as apple pie, baseball, or creating a corporate subsidiary to limit liability and risk. Just as pies and baseball are governed by recipes and rules, respectively, establishing or piercing a corporate veil works much the same.  

A corporation or limited liability company (LLC) is ordinarily regarded as a legal entity separate and distinct from its owners and members. Entire industries—including finance and real estate—rely on a shared understanding that both sides in any given transaction will be represented by their respective corporate avatars: special-purpose entities created for the sole purpose of insulating the parent company from the risks associated with a particular deal, investment or agreement. In commercial real estate, for instance, it is often the case that both the landlord and the tenant listed on a lease are shell entities, the upshot being that if (or when) something goes wrong, neither parent entity will be on the hook.

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