The corporate veil is important because it protects shareholders and directors from personal liability for the debts and liabilities of the corporation. For example, if a corporation goes bankrupt, the shareholders and directors are not personally liable for the debts of the corporation.
The corporate veil can also be used to protect the assets of the corporation from being seized by the personal creditors of shareholders or directors. For example, if a shareholder has personal debts, his or her creditors cannot seize the assets of the corporation to satisfy those debts.
However, the corporate veil is not absolute. In some cases, the courts may pierce the corporate veil and hold shareholders or directors personally liable for the debts and liabilities of the corporation. This can happen if the shareholders or directors have engaged in fraudulent or illegal activity, or if they have failed to maintain the separate identity of the corporation.