Piercing the Corporate Veil in Florida: What It Really Means (and When Miami-Dade Courts Will Do It)

Author: Yoel Molina, Esq., Owner and Operator of the Law Office of Yoel Molina, P.A.

05 February 2026

Piercing the Corporate Veil in Florida: What It Really Means (and When Miami-Dade Courts Will Do It)

If you own a Florida corporation or LLC, you formed it to protect your personal assets—your home, savings, and wages—from business debts and lawsuits. “Piercing the corporate veil” is the legal doctrine that lets a court ignore that liability shield in rare, extreme situations. In other words, if a company is misused as a personal alter ego or to commit wrongdoing, a judge can hold the individual owners (and sometimes officers) personally liable.

Florida courts set a high bar for this remedy. They do not lightly disregard the corporate form. To pierce, Florida law generally requires proof of improper conduct, not just sloppy bookkeeping or a failed business.

Florida’s test: three things a plaintiff must prove

Florida cases describe a three-part showing before a court will pierce the veil:

Alter ego / mere instrumentality – The company was dominated and controlled by an individual to the point that the business had no independent existence.
Improper or fraudulent use of the entity – The corporation or LLC was formed or used for an improper purpose (e.g., to mislead creditors, perpetrate fraud, or evade existing obligations).
Causation – The improper conduct caused the creditor’s loss.

This framework appears repeatedly in Florida decisions applying the Supreme Court’s lead case, Dania Jai-Alai Palace, Inc. v. Sykes, which emphasized that improper conduct is required to pierce. A mere ownership/control relationship is not enough.

The “improper conduct” requirement—Florida’s guardrail

Florida’s Supreme Court made clear in Dania Jai-Alai that courts respect the corporate form unless there is wrongdoing. That case is still the touchstone: a veil may be pierced only when a company is organized or used to mislead or defraud. Florida’s appellate courts have followed suit, holding that limited liability isn’t forfeited just because an owner is hands-on or a business is closely held. There must be misuse of the entity.

Examples of improper conduct that can support piercing in Florida include: using a shell company to dodge an existing judgment, transferring assets to hinder creditors, or papering sham contracts through a captive subsidiary. Courts have explained this concept in both parent-subsidiary and owner-company contexts.

By contrast, undercapitalization alone or failure to follow every corporate formality usually will not carry the day without proof of deceptive or wrongful purpose. Evidence of sloppiness can be a factor, but Florida courts look for a dishonest use of the entity that caused the harm.

Does this apply to LLCs as well as corporations?

Yes. Florida courts apply essentially the same veil-piercing principles to LLCs. In Gasparini v. Pordomingo (Fla. 3d DCA 2008)—the appellate court that covers Miami-Dade— the court reiterated the need for (1) alter-ego control, (2) improper conduct, and (3) causation. If those elements are proven, members of an LLC can face personal exposure just as corporate shareholders can.

What about non-shareholders or related parties?

Florida law is cautious about extending veil piercing to people who don’t actually own the company. The Eleventh Circuit, applying Florida law, has discussed limited, fact-specific situations where a closely related non-owner (such as a spouse of a shareholder) might still be liable, but emphasized that Florida does not generally permit veil piercing against non-owners. The inquiry is intensely fact-driven.

Common misconceptions we see in Miami-Dade

Myth 1: “If I co-mingle funds once, I’m automatically personally liable.” Not automatically. Co-mingling is a red flag and evidence of alter-ego control, but Florida courts still look for improper purpose and causation. One bad transaction rarely equals personal liability by itself.

Myth 2: “Single-member LLCs have no veil.” False. Single-member entities enjoy limited liability. The same test applies; it just may be easier to show alter-ego control when there is only one owner. You still need proof of improper use and causation.

Myth 3: “If my company can’t pay, the court will make me pay.” In Florida, business failure alone is not grounds to pierce the veil. The focus is on misuse of the entity, not on insolvency by itself.

Practical examples (Florida-style)

Judgment dodger: A Miami business owner loses a lawsuit, then moves all revenue to a new company with the same customers and management to avoid paying. A creditor may argue the new company is the owner’s alter ego used to hinder creditors—a classic veil-piercing fact pattern if the transfer was orchestrated to mislead and caused the non-payment.
Sham “subsidiary” deal: A parent company causes its thinly capitalized subsidiary to sign a contract it never intends to honor, then leaves the counterparty unpaid while assets are kept elsewhere. Courts have recognized this as improper use that can support piercing.
Owner as the business: An owner pays personal expenses out of the company account, uses no contracts, and tells vendors “don’t worry, I’ll make sure you get paid,” then shifts cash out to avoid a known debt. Those facts can support alter-ego control plus improper purpose and causation.

How to reduce your veil-piercing risk (best practices for Florida owners)

These are the habits I advise to Miami-Dade entrepreneurs and closely held companies:

Keep clean books and separate accounts. Never pay personal expenses from the company account or vice versa.
Use the entity’s full legal name on contracts, invoices, bank accounts, and letterhead.
Document capital contributions and loans between owners and the company; use simple promissory notes for advances and pay them back as agreed.
Sign correctly: “ABC, LLC, by Jane Smith, Manager.”
Hold at least minimal governance rituals. Even LLCs benefit from written consents and an operating agreement.
Avoid asset siphoning. Don’t strip cash or property out of the business when a creditor claim is foreseeable.
Price inter-company dealings at arm’s length. If you own multiple entities, paper the transactions.
Be candid with counterparties. Don’t use a new entity to dodge yesterday’s obligations. That’s the kind of “improper purpose” that opens the door to piercing.

These steps don’t make you lawsuit-proof, but they help show your company is a real, separate business, not a personal pocket.

What plaintiffs must plead and prove

If you’re evaluating a claim (or defending one) in the Eleventh Judicial Circuit (Miami-Dade), expect the court to look for specific facts showing (1) domination/alter ego, (2) improper conduct in forming or using the entity, and (3) a causal link to damages. Conclusory allegations like “the company is the owner’s alter ego” without details are typically insufficient. Florida’s insistence on improper conduct is the center of gravity in these cases.

On the defense side, we often focus discovery on: separate bank records, contracts signed in the entity’s name, inter-company agreements, capitalization history, and communications showing legitimate business purpose. On the plaintiff side, we look for asset-diversion patterns, contradictory statements to creditors, and paper trails suggesting a plan to evade obligations.

Remedies if the veil is pierced

When a Florida court pierces the veil, the individuals behind the entity can be held jointly and severally liable for the company’s debt or judgment related to the misconduct. In parent-subsidiary contexts, a parent may be liable for its subsidiary’s obligations if the subsidiary was used as an instrumentality to defraud or mislead. Still, veil piercing is exceptional—courts will not use it to rewrite ordinary business risk or honest mistakes.

Bottom line for Florida business owners

Florida law protects limited liability, but it does not protect abuse of the corporate form. If you treat your company as a real, separate enterprise and avoid using it to mislead or evade obligations, you greatly reduce the risk that a Miami-Dade court will pierce the veil. Conversely, if a company is just a façade for personal dealings or a vehicle to dodge known debts, a court can and will look past the entity.

For legal help with piercing the corporate veil in Florida—bringing or defending the claim—contact Attorney Yoel Molina at admin@molawoffice.com, call (305) 548-5020 (Option 1), or message via WhatsApp at (305) 349-3637.