Can you still hide behind the “corporate veil” in 2025?

The corporate veil, being the shield to protect shareholders from personal liability, has long been an incentive for business owners to incorporate as private companies. It has also been used by those individuals looking to conceal their identity from public view. However, in 2025, question marks have been raised over whether this concept still offers the level of concealment that it once did. Legal reforms, the blurring of international boundaries and advances in financial investigation technologies have made it increasingly difficult for individuals to hide their identities behind their corporation.

Incorporation creates a legal separation between a company and its owners, meaning the company can hold assets and be held legally accountable in its own name. This separation has been vital to encouraging entrepreneurship and limiting personal risk. One of the issues when seeking to pierce the corporate veil to target those individuals sat behind the company was the use by certain individuals of complex offshore group structures to conceal their identifies.

Legal reforms are playing a major part in changing the landscape and insisting on further transparency in corporate ownership. The Economic Crime and Corporate Transparency Act (ECCTA) in the UK echoes concepts of the EU’s strengthened Anti-Money Laundering Directives and the US’s Corporate Transparency Act. These acts insist on beneficial ownership reporting, meaning companies are typically now required to declare their ultimate ownership/control, with the threat of penalties and criminal charges for non-compliance.

ECCTA has bolstered the powers of UK regulators, creditors and litigants. From Autumn 2025, the scope and detail of the register of people with significant control (PSC) will be increased, requiring verification. This change is accompanied by the provision of stronger investigative powers to regulators, allowing them to require information, documents and explanations from companies and their officers (Information Requests). Furthermore, ECCTA allows for stronger penalties for wrongdoing, including unlimited fines or imprisonment for those who provide false information on their PSC register or fail to comply with information requests. For litigants, access to this additional information will likely lead judges to be more willing to act when corporate structures are clearly being used to frustrate justice.

So, is it still possible to hide behind the corporate veil in 2025? Yes, in theory, but the likelihood is that this will become increasingly rare. For those acting in good faith, the veil continues to provide legitimate protection and legal certainty. For those attempting to exploit it, however, the combination of legal reform, transparency requirements, and increased penalties means that the corporate veil is much more transparent and no longer a reliable cloak for concealment.