Does corporate structure shield a shareholder from personal liability in the event of professional malpractice?

Does corporate structure shield a shareholder from personal liability in the event of professional malpractice?

• A. Yes
• B. No
• C. It depends on state law
• D. Only for non-professional corporations

Answer: (B)

A corporate structure provides a shield for owners against personal liability for the company’s debts and actions, but that protection does not automatically cover personal liability for professional malpractice. In chiropractic practice, the professional who delivers care is typically responsible for any negligent acts, and the corporation itself can be liable for its employees and for the conduct of the business. Shareholders aren’t automatically protected from personal liability for malpractice. There are exceptions where the corporate veil can be pierced—such as when the corporate form is used as a vehicle to commit fraud, when there is commingling of personal and corporate assets, or when the company is undercapitalized and not properly run as a distinct entity. In those situations, personal liability can attach to owners. So, while a corporation can limit liability in many areas, it does not guarantee immunity from personal liability for professional malpractice.

A corporate structure provides a shield for owners against personal liability for the company’s debts and actions, but that protection does not automatically cover personal liability for professional malpractice. In chiropractic practice, the professional who delivers care is typically responsible for any negligent acts, and the corporation itself can be liable for its employees and for the conduct of the business. Shareholders aren’t automatically protected from personal liability for malpractice.

There are exceptions where the corporate veil can be pierced—such as when the corporate form is used as a vehicle to commit fraud, when there is commingling of personal and corporate assets, or when the company is undercapitalized and not properly run as a distinct entity. In those situations, personal liability can attach to owners. So, while a corporation can limit liability in many areas, it does not guarantee immunity from personal liability for professional malpractice.