You’ve done your homework, consulted with your accountant and lawyer, and have decided that it is the right time to incorporate your small business. You want to take advantage of some of the main benefits of incorporation: potential tax savings and limited personal liability. This latter benefit is a result of the fact that corporations are considered separate legal persons under the law. This means that they are distinct from their shareholders (i.e., owners), and therefore can shield their shareholders’ personal assets from creditors of the corporation. This corporate separateness is the entrenched rule established in the 1800s to keep shareholders immune from personal liability; it is codified by legislation, such as the Ontario Business Corporations Act (OBCA). As such, the courts are very reluctant to “pierce the corporate veil”; that is, they will rarely look behind the corporation to its shareholders, directors and officers for holding such persons personally liable for the acts of the corporation. However, there are some exceptions created by case law (albeit each requiring a high burden of proof), where a court will deem it just and equitable to pierce the corporate veil. These exceptions should be understood by small business owners who have incorporated their business, as well as by legitimate creditors looking to recover money owed to them.