SMLLC i ran for 3 years. shut it down 2024 (filed dissolution). a former vendor is now claiming i owe $4,200 from an unpaid invoice and his demand letter says he'll "pierce the corporate veil and come after me personally." i did keep separate books and a separate bank account. should i be worried?
veil piercing is hard in most states. courts require alter ego AND injustice. if you kept separate books, separate bank account, didn't commingle funds, and the LLC was adequately capitalized at the time the debt arose, you're probably fine.
also worth checking: did you do a proper dissolution that included notice to known creditors? in many states, failure to notify known creditors can extend personal liability. usually a 60-day claims notice is required.
"will pierce the veil" is letter-writer chest pounding 90% of the time. courts almost never pierce. don't ignore but don't panic. respond calmly with what you have.
I'm Sergei Tokmakov, California attorney (Bar #279869). Veil piercing requires very specific factual showings that vary by state but generally fall into these categories: (1) commingling of funds and personal/business assets, (2) failure to follow corporate formalities, (3) undercapitalization at relevant times, (4) using the LLC to perpetrate fraud, (5) unity of interest such that "the LLC is the alter ego of the owner."
From your facts (separate books, separate bank account, properly dissolved), the threshold is high. The $4,200 amount is also low — vendor would have to invest $5-10k in litigation to potentially recover that, which doesn't pencil out.
Practical advice: don't ignore but don't capitulate. A calm response letter noting the LLC's dissolution and the corporate-form defense often resolves it. If you want a response letter on attorney letterhead, $575 flat. Informational only.