The Corporate Veil Explained

A company is a juristic entity with a legal identity that is separate from its members. This means that the company has the capacity to conclude contracts, purchase goods and services, and institute legal  proceedings against others. Conversely, a company may accumulate debt and have legal proceedings instituted against it. As such, when a company accumulates debt that it is unable to pay, its creditors cannot turn to its members to relieve the company's responsibilities.

What Is The Principal Of The Corporate Veil

As discussed above, a company has the capacity to enter into agreements and accumulate debt in its own name. A company is not an actual person, so its members will be responsible for conducting the business of the company on its behalf. This means that an authorized member of the company will conclude agreements in the company's name.