Nevada applies a three-element veil-piercing test under NRS 86.376: influence and governance, unity of interest, and use of separateness to sanction fraud or promote manifest injustice. Nevada’s LLC statute is exceptionally flexible, but the 2024 Nevada Supreme Court decision in Ene v. Graham shows that single-member LLCs without governance separateness remain exposed to the same alter-ego analysis as any corporation.
Nevada’s Veil-Piercing Standard
Nevada veil piercing is governed by statute and case law together. NRS 86.376 sets the framework for LLCs; NRS 78.747 sets the parallel framework for corporations. Both impose the same three elements: (1) the entity is influenced and governed by the person sought to be held liable; (2) there is unity of interest and ownership such that the entity and that person are inseparable; and (3) adherence to the entity’s separate identity would sanction fraud or promote manifest injustice.
Nevada courts examine a familiar set of factors when applying the test: commingling of funds, undercapitalization, unauthorized diversion of funds, treatment of corporate assets as the individual’s own, and failure to observe corporate formalities. Nevada does not require actual fraud — manifest injustice is enough — placing the standard somewhere between Texas’s strict actual-fraud requirement and California’s liberal alter-ego doctrine.
The Gardner v. Henderson Water Park decision (2017) confirmed for the first time that NRS 86.376 applies to LLCs — the Nevada Supreme Court held that LLCs “provide the same sort of possibilities for abuse as corporations, and creditors of LLCs need the same ability to pierce.”
Real Cases from Nevada
Polaris Industrial Corp. v. Kaplan (Nev., 1987)
Veil NOT pierced — despite unity of interest
The Nevada Supreme Court found that there was unity of interest between the salesman and his corporation — he regularly withdrew funds without following corporate formalities. But the court refused to pierce, holding that the withdrawals were “in lieu of salary” and were not the cause of the unpaid debt. The court required a showing that the alter-ego conduct actually caused the injury, and the plaintiff couldn’t make that showing. The case stands for the proposition that even informal practices can be defended if they have a legitimate business purpose and a documented relationship to compensation or operations.
What governance records would have changed the outcome: The veil held in this case, but the case is instructive on what makes informal practices defensible. Annual written consents authorizing salary or distributions — instead of treating informal withdrawals as compensation after the fact — would have eliminated the unity-of-interest argument entirely. Banking resolutions and distribution authorizations are the documents that turn an informal pattern into a documented compensation framework.
Ene v. Graham (Nev., 2024)
Veil pierced — sole member liable for personal injury on LLC property
This is a landmark single-member LLC piercing case. The plaintiff was injured on property owned by a single-member LLC. The Nevada Supreme Court applied NRS 86.376 and pierced the veil after finding: the sole member used a personal gate code for property access; he used the property without paying the LLC; insurance on the property was held in his personal name; and he was the personal guarantor on the mortgage. The total absence of governance separateness was fatal. The 2024 decision is now the leading Nevada case on single-member LLC piercing and is widely cited as a warning to owners who treat LLC property as their own.
What governance records would have changed the outcome: Multiple types of governance documentation would have shifted the analysis. A formal lease agreement between the member and the LLC documenting any personal use of the property. Insurance held in the LLC’s name, authorized through a banking resolution. A banking resolution authorizing the mortgage in the LLC’s name (with personal guaranty handled separately and documented). Annual written consents reviewing the LLC’s operations and ratifying the property’s use. Each is the kind of document Minutes.llc generates — and each addresses one of the specific factors the court relied on.
For the full case story and what this means for every property-holding LLC, see our dedicated breakdown: Your LLC’s Gate Code Could Cost You Everything.
Gardner v. Henderson Water Park (Nev., 2017)
LLC alter-ego doctrine confirmed
This case arose from the non-fatal drowning of a six-year-old at the Cowabunga Bay Water Park. The Nevada Supreme Court directly addressed — for the first time — whether the alter-ego doctrine applies to LLCs under NRS 86.376. The court held yes, writing that “LLCs provide the same sort of possibilities for abuse as corporations, and creditors of LLCs need the same ability to pierce the LLC’s veil when such abuse exists.” The decision allowed alter-ego claims to proceed against LLC managers — making clear that Nevada’s LLC-friendly statutes do not exempt the entity from veil-piercing liability.
What governance records would have changed the outcome: The decision is primarily about the legal framework, not about specific facts. The structural takeaway for Nevada LLCs is that NRS 86.376 applies. Documenting that the LLC operates separately from its managers — through annual written consents, separate banking, distribution authorizations, and operating-agreement compliance — produces the record that defeats the alter-ego analysis at the unity-of-interest prong.
How to Protect Your LLC in Nevada
Nevada’s reputation for LLC flexibility is real, but it can be misleading. The statutes are flexible, but the veil-piercing analysis is not. Nevada courts apply NRS 86.376 with the same rigor they apply to corporate veil piercing under NRS 78.747 — and the Ene v. Graham decision shows that single-member LLCs are exposed when the documentary record looks like personal property dressed up as an LLC.
The defensive playbook centers on documented separateness. Property used by the LLC should be insured in the LLC’s name. Banking should be controlled through a formal banking resolution that names authorized signers. Personal use of LLC property should be documented through a lease or rental arrangement. Distributions should be authorized in writing. Annual written consents should confirm officers, ratify the year’s actions, and review compliance. Each is a piece of evidence on the unity-of-interest prong — and each is a Minutes.llc document type.
Without these records, your personal assets are exposed in Nevada — even with Nevada’s flexible LLC statutes working in your favor. Ene v. Graham is a reminder that flexibility is not immunity. Minutes.llc generates the governance documents Nevada courts examine, signs them with a digital corporate seal, hashes them, and stores them in a private offshore jurisdiction.
Not sure if your Operating Agreement covers these protections? Check your Operating Agreement for free at CheckMy.llc — it takes 5 minutes and shows you exactly which provisions are missing.
Frequently Asked Questions
Does Nevada require LLCs to keep meeting minutes?
Nevada law does not require LLCs to keep meeting minutes by statute. NRS Chapter 86 is famously flexible — one of the reasons Nevada is a popular LLC domicile. However, the Nevada Supreme Court’s NRS 86.376 framework lists “failure to observe corporate formalities” as a factor, and the Ene v. Graham (2024) decision pierced a single-member LLC partly on the absence of governance separateness.
What is the standard for veil piercing in Nevada?
Nevada applies a three-element test under NRS 86.376 (LLCs) and NRS 78.747 (corporations): (1) the LLC is influenced and governed by the person sought to be held liable; (2) there is unity of interest and ownership; and (3) adherence to the entity’s separate identity would sanction fraud or promote manifest injustice. Courts examine commingling, undercapitalization, unauthorized fund diversion, treatment of corporate assets as personal, and failure to observe formalities.
Can a single-member LLC be pierced in Nevada?
Yes. The Nevada Supreme Court’s 2024 Ene v. Graham decision pierced the veil of a single-member LLC after finding personal use of LLC property, personal-name insurance, personal mortgage guarantees, and a complete lack of governance separateness. Nevada applies NRS 86.376 to single-member and multi-member LLCs alike, and personal-use patterns frequently drive single-member piercing outcomes.
What records protect an LLC from veil piercing in Nevada?
Nevada courts examining the unity-of-interest prong look for documented separation: separate bank accounts with banking resolutions, formal authorization for property use between members and the LLC (lease agreements, distribution authorizations), insurance held in the LLC’s name, and annual written consents establishing officers and ratifying decisions. Polaris Industrial v. Kaplan shows that documenting compensation through formal resolutions defeats unity-of-interest arguments.
Does Minutes.llc provide legal advice?
No. Minutes.llc is a document automation platform, not a law firm. The information on this page is for informational purposes only and does not constitute legal advice. Veil-piercing outcomes depend on specific facts and circumstances. Consult a licensed Nevada attorney for legal questions specific to your situation.
Related reading: All 50 states — veil-piercing guide · The 7 Risks of LLC Veil Piercing · Do Single-Member LLCs Need Meeting Minutes? · Governance Glossary
Don’t Make Nevada Flexibility Look Like Nevada Negligence
The 2024 Ene v. Graham decision shows what happens when LLC property gets treated like personal property. The owners who avoid that outcome do it with paperwork — lease agreements, banking resolutions, annual written consents.
Create Your Record →This page is for informational purposes only and does not constitute legal advice. The cases described are based on publicly available court opinions and legal analyses. Outcomes depend on specific facts and circumstances. Minutes.llc is not a law firm and does not provide legal advice. Consult a licensed attorney for legal questions specific to your situation.