In this paper, we have analyzed the institute of piercing the corporate veil. 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. The Republic of Croatia has adopted the Institute and define the criteria for its application in the Companies Act, specifically in Article 10 of that Act. The Companies Act specifies that members of limited liability companies, shareholders in share companies and limited partners in a limited partnership is not liable for the obligations of society. Such irresponsibility members consequence of the principle of separation of the company's capital from its members. It is a responsibility which is based on the law and which derives from the circumstances that it is a member of the company. Assumptions liability arising from: a) a dominant position in the company member, b) mixing property and member of society, and c) undercapitalization of company. Companies Act gives four examples when you consider that especially came to abuse and responsibilities of members if a member used by the company for it to achieve the objective which it is normally forbidden, if used by the company to prevent damage to creditors, if contrary to the law manages the assets of the company as to it is his property, and if in his favor or in favor of any other person reduce the company's assets, even though he knew or should have known that it would not be able to meet its obligations. In addition to detailed analysis of the above, this paper will analyze the English and German doctrine of piercing the corporate veil. It also will provide an overview of recent judgments of Croatian courts in connection with themInstitute, with the purpose of better clarifying the Institute and its understanding.