Piercing the corporate veil is the term which derives from the fact that legal person as a legal entity is separated from the legal entities of its members. Corporations have their own assets and debts for which, according to the general rule, members or shareholders are not held responsible. With that said, members or shareholders of companies are risking only their investment in company. Such a legal arrangement stimulates investors who feel protected by knowing that they do not risk their personal property, such as houses or cars, by investing. On the other hand, with this kind of arrangement also comes the responsibility of acting in good faith, so that the creditors would not be intentionally damaged by the actions of members avoiding the consequences of separate responsibilities. Immoral doings by members of a limited liability company or shareholders of a joint stock company, aimed on achieving their, otherwise prohibited purposes, constitute abuse of the principle of irresponsibility of members as a consequence of the principle of separation and may lead to the piercing of the corporate veil if proven. Croatian law regulated this issue by Article 10, paragraph 3 of the Croatian Companies Act. Moreover, given that the piercing of the corporate veil is a widely discussed and globally controversial institute, legal systems around the world have developed numerous doctrines in attempts to regulate this issue in the best possible way. This thesis will systematically address the issue of piercing the corporate veil and its legal consequences. It will provide a detailed overview of Croatian legislation related to the topic and refer to the said institute in tax law, arbitration law and criminal law. The author also analyzes the case law of both Croatian courts and the European Court of Human Rights. Finally, this paper will analyze comparative approaches to piercing the corporate veil in Austria, Germany and the United States to provide thorough overview of the institute and the solution.