The Alter Ego Doctrine in Florida: When Courts Look Past the Company to Reach the Owners (Miami-Dade Focus)

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

10 February 2026

The Alter Ego Doctrine in Florida: When Courts Look Past the Company to Reach the Owners (Miami-Dade Focus)

If you own or manage a Florida corporation or LLC, you rely on limited liability to separate business debts from your personal assets. The alter ego doctrine is the core theory plaintiffs use to ask a court to disregard that separation—what most people call “piercing the corporate veil.” In plain English: if an entity is used as a façade for personal dealings or to perpetrate wrongdoing, a judge can treat the company and the individual as one and the same for liability purposes.

Florida courts, especially here in Miami-Dade, apply this remedy sparingly. The doctrine is not a backdoor to make owners pay every time a business fails. The Florida Supreme Court’s landmark decision in Dania Jai-Alai Palace, Inc. v. Sykes remains the compass: improper or fraudulent use of the corporate form—not mere ownership or tight control—is the key to any alter-ego case. ( Justia Law)

What “alter ego” actually means under Florida law

Florida courts generally require a three-part showing before they will disregard the corporate or LLC shield:

The company was a mere instrumentality or alter ego of the defendant (a lack of real separateness).
The corporate form was used for an improper or fraudulent purpose (e.g., to mislead creditors or evade existing obligations).
That improper use caused the plaintiff’s loss (proximate causation).

Florida appellate decisions—including the Third District (which covers Miami-Dade)—consistently apply this framework, often citing Dania Jai-Alai and Gasparini v. Pordomingo. The emphasis is on misuse and causation, not just sloppy management. ( Justia Law)

Corporations vs. LLCs: same alter-ego principles

Although LLCs have different statutes and governance mechanics than corporations, Florida courts use essentially the same alter-ego test for both. In Gasparini v. Pordomingo, the Third DCA reiterated the three elements—alter-ego control, improper purpose, and causation—and affirmed personal liability where the facts supported misuse that caused the claimant’s injury. If proven, members or managers of an LLC can be held personally liable just like corporate shareholders. ( Mavrick Law Firm)

What alter ego is—and what it isn’t

Is:

Using a “shell” company or a brand-new sister entity to evade a known judgment or creditor.
Shifting assets among related entities to frustrate collection while keeping the same customers, management, and revenues flowing.
Papering sham contracts through a thin subsidiary that never intended to perform, while value sits in a different pocket.

Isn’t (by itself):

Simply owning 100% of a closely held company.
Being a hands-on owner who signs checks and negotiates deals.
Undercapitalization or imperfect corporate formalities without proof of a deceptive or wrongful purpose. Florida’s high bar requires improper conduct in the use of the entity, not just poor housekeeping. ( Justia Law)

The evidence courts actually look for

When I evaluate an alter-ego claim (on either side), I focus on what a Miami-Dade judge or jury will find persuasive:

Commingling: personal expenses paid from the company account (or vice versa), undocumented “loans,” or owners using company funds as an ATM.
Mislabeling and signatures: deals signed personally instead of “ABC, LLC, by Maria López, Manager,” invoices that omit the entity’s full legal name, or owners promising “I’ll make sure you get paid” in emails.
Related-party transfers: money moving to insiders or affiliates when a specific creditor dispute has already emerged.
Continuity facts: a new entity with the same people, customers, and assets replacing the old debtor overnight (“ newco to dodge oldco”).
Badges of fraud: secrecy, timing of transfers right after a demand or judgment, lack of consideration, or inconsistent stories to counterparties.
Causation paper trail: how the misuse actually led to the non-payment or loss (e.g., a creditor would have collected from Entity A but for the diversion to Entity B).

How plaintiffs should plead and prove alter ego in Miami-Dade

Alter-ego claims live or die on specifics. Bare allegations that “the company is the owner’s alter ego” are vulnerable to dismissal. Effective pleadings typically allege:

Concrete facts showing the company’s lack of independence (control over bank accounts, absence of arm’s-length dealings, ignored governance).
Improper purpose in forming or using the entity (to mislead creditors, conceal assets, or avoid an existing obligation).
A clear causal link between the misuse and the claimant’s damages.

At summary judgment or trial, successful plaintiffs marshaling bank records, emails, contracts, and testimony can transform “red flags” into a story of misuse that caused harm—which is exactly what Florida law requires. ( The Florida Bar)

Defense playbook: preserving the liability shield

Most business owners aren’t trying to game the system—they’re trying to meet payroll and grow. Your best defense is to behave like the separate legal entity you are:

Segregate finances: dedicated business accounts; no personal bills from the company card; document every owner draw or inter-company loan with simple notes and schedules.
Sign correctly, every time: “XYZ Holdings, LLC, by Ana Pérez, Managing Member.” Avoid signing just your name.
Use complete legal names on contracts, invoices, bank accounts, and tax forms.
Paper related-party deals at fair market terms (leases, IP licenses, management fees).
Adopt and follow an operating agreement (LLC) or bylaws (corporation); capture major decisions with written consents.
Avoid timing traps: do not move assets when a dispute is brewing or after a demand letter hits.
Tell a consistent story: your emails, invoices, and negotiations should make clear the entity—not you personally—is the counterparty.

These steps don’t guarantee a win, but they create the record that defeats alter-ego claims before trial.

Parent–subsidiary and sister-company scenarios

Alter-ego doesn’t only target human owners. Plaintiffs may also argue that a parent should answer for a subsidiary’s obligations (or vice versa) when one is a mere instrumentality of the other and the structure is used for an improper purpose. Courts examine the economic reality: shared officers, unified control of finances, and whether the subsidiary has any real business apart from shielding the parent. But again, the constant in Florida is improper use plus causation—not corporate family ties alone. ( NSUWorks)

What about “reverse” veil piercing?

In a reverse veil-piercing theory, a creditor of an individual seeks to reach the company’s assets by treating the entity as the person’s alter ego. Florida courts are cautious with reverse piercing and treat it as an exceptional equitable remedy; arguments must be tightly tied to misuse and fairness concerns, and they face practical obstacles (like prejudice to innocent co-owners). Treat it as a narrow, fact-specific path, not a routine collection strategy. ( Lawayala)

Practical examples (Florida-style)

The judgment dodge: After a supplier wins a judgment, the debtor’s owner forms NewCo, switches the same contracts and customers the next week, and routes revenue there. The supplier builds an alter-ego case to reach the owner (and sometimes NewCo) because the restructuring was designed to evade collection and caused non-payment.
The sham subsidiary: A parent directs its thinly capitalized subsidiary to sign a major contract it never intended to perform, while keeping assets upstairs. When the project collapses, the counterparty seeks to hold the parent liable under alter-ego and instrumentality theories.
The personal piggy bank: An owner regularly pays rent, car payments, and vacations from the company account without documentation, then drains the account when a dispute surfaces. The creditor ties those withdrawals to the unpaid invoices to establish causation.

Quick checklist: building (or defeating) an alter-ego case

For plaintiffs/creditors

Gather bank statements, GLs, and canceled checks showing commingling or siphoning.
Map transfers among related entities and insiders around key dates (demand letters, lawsuit filings, judgments).
Collect emails or texts that show personal promises or admissions about entity misuse.
Prove causation: “But for the transfer/misuse, we would have been paid.”

For defendants/owners

Produce clean governance records (operating agreement, resolutions, consents).
Show arm’s-length inter-company agreements and actual performance (invoices, receipts).
Demonstrate capitalization appropriate for the business and ordinary-course payments to vendors.
Explain legitimate business reasons for structure and timing—before disputes arose.

Bottom line for Miami-Dade businesses

Florida’s alter ego doctrine exists to punish misuse, not business failure. If you keep your entity truly separate and avoid using it as a tool to mislead creditors, your liability shield remains strong. If, however, the company becomes a façade for personal dealings or a vehicle to evade known obligations, a court can and will look through it.

For legal help with alter ego and veil-piercing issues in Florida—building a claim or defending one—contact Attorney Yoel Molina at admin@molawoffice.com, call (305) 548-5020 (Option 1), or message via WhatsApp at (305) 349-3637