Goldberg v KOSL Bldg. Group, LLC, 2025 NY Slip Op 01790
The whole point of forming an LLC is the shield: the company's debts belong to the company, not its owners. But that shield is conditional — and Goldberg catalogs the conditions. When owners treat the LLC as a fiction, courts can treat it the same way and "pierce the corporate veil."
What the court identified
The factors relevant to piercing the corporate veil include:
- Failure to adhere to LLC formalities — the company exists on paper but isn't operated as a genuine separate entity;
- Inadequate capitalization — the LLC never had funding realistically sufficient for its obligations; and
- Commingling of assets — personal and company money flowing through the same accounts, company funds used for personal expenses, and the like.
When such factors show the LLC was an owner's alter ego used to work an injustice, personal liability can follow.
Why this doctrine exists
Limited liability is a bargain: the law grants owners protection because the business is a real, separately maintained entity. Owners who skip the formalities, drain or never fund the company, and blur the line between "mine" and the company's are claiming the bargain's benefits without paying its price. Veil-piercing is how courts balance the books.
What this means for you
In plain English, two audiences should care:
- Business owners: your LLC protects you only if you respect it. Keep separate bank accounts, document major decisions, fund the company adequately, sign contracts in the company's name, and never treat the business account as a personal wallet. These habits are cheap; losing the shield is not.
- People owed money by an LLC: if the company that harmed you or breached your contract turns out to be an empty shell, that may not be the end. Where owners ignored formalities, undercapitalized, or commingled funds, the individuals behind the LLC may be reachable.
This case note is attorney commentary for general information — it is not legal advice about your situation. Every case turns on its own facts.