alter ego

In one sentence

A second self or alternative identity, often used to pierce corporate liability shields.

Plain English

Alter ego refers to treating a corporation or business entity as merely an extension of its owner's personal identity. Courts use the alter ego doctrine to hold an owner personally liable for the company's debts or wrongdoings when the owner has so thoroughly controlled and misused the company that it's really just a personal tool rather than a separate legal entity. This pierces the "corporate veil" that normally protects owners from liability.

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Example

A business owner uses their corporation's bank account as a personal piggy bank, doesn't maintain separate records, and makes all decisions without any corporate formality. If the company can't pay a judgment, a court might find the owner is the alter ego of the corporation and hold the owner personally responsible.

Used in a sentence

“The judge ruled that the owner was the alter ego of the corporation and could be held personally liable for the company's debts.”

Related terms

Jurisdiction

The legal authority of a court to hear and decide a case.

Breach of Contract

Failure to do what a contract requires, without a valid legal excuse.

adjudicate

To hear and decide a case in court, determining the rights and responsibilities of the parties.

Formal Contract

A contract that requires specific formalities, such as a seal, notarization, or written form, to be enforceable.

Stand Your Ground

A law allowing a person to use force, including deadly force, to defend themselves without a duty to retreat.

Castle Doctrine

A law stating that a person's home is their castle and they can use force to defend it without duty to retreat.

Expungement

A legal process that erases or seals a criminal conviction from your record.

Felony

A serious crime punishable by more than one year in prison or death.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.