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  • Anisa Arra

Don't Let Your Corporation Become Your Alter Ego

Treating a corporation as your alter ego refers to the concept in corporate law where an individual treats the corporation as if it were their personal property, rather than as a separate legal entity. This can occur when the individual fails to observe the formalities of corporate governance and observing the distinctions between the individual's personal assets and the corporation's assets.

When a court determines that a corporation is being treated as the alter ego of an individual, it can "pierce the corporate veil" and hold the individual personally liable for the debts and obligations of the corporation. This means that the individual's personal assets, such as their bank accounts and property, may be seized to pay off the corporation's debts.


To avoid being treated as the alter ego of a corporation in Ontario, it is important to observe the formalities of corporate governance and maintain the distinction between the corporation and the individual. This includes holding meetings, keeping proper records, and ensuring that the corporation has its own bank accounts and other assets separate from the individual's personal assets. It is also important to avoid commingling the corporation's funds with the individual's personal funds and to observe any other legal requirements for corporate governance in Ontario.

In summary, treating a corporation as your alter ego can have serious legal consequences, including personal liability for the debts and obligations of the corporation. To avoid being treated as the alter ego of a corporation, it is important to consult with a business lawyer to understand your obligations as a shareholder, director, or officer of the corporation, the importance of maintaining a minute book and a clear distinction between the corporation and yourself as an individual.


If you need business law advice, please email us at reception@arralawfirm.com or download the Arra Law Firm app in the App Store or Google Play.



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