alter ego

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Alter ego is a legal doctrine whereby the court finds that a corporation lacks a separate identity from an individual or corporate shareholder. The court applies this rule to ignore the corporate status of a group of stockholders, officers, and directors of a corporation with respect to their limited liability. Finding alter ego gives the court cause to pierce the corporate veil and hold individual shareholders personally liable for debts of the corporation. 

Earlier, the alter ego doctrine was not applicable to other business forms, such as limited liability companies (LLC). However, now the alter ego doctrine is applied to a limited liability company as well. 

[Last updated in June of 2022 by the Wex Definitions Team]