Washington uniquely codifies its LLC veil-piercing standard in RCW 25.15.061, linking LLC member liability to the corporate-shareholder standard with an explicit carve-out for meeting formalities. Washington courts approach piercing “with skepticism.” The 1980 Morgan v. Burks case pierced where a corporation was “gutted and left without funds” — the carve-out for formalities does not protect against asset-stripping.
Washington’s Veil-Piercing Standard
Washington has a unique statutory framework for LLC veil piercing. RCW 25.15.061 provides that LLC members are “personally liable for any act, debt, obligation, or liability of the limited liability company to the extent that shareholders of a Washington business corporation would be liable in analogous circumstances.” However, the statute explicitly carves out an exception: “the failure to hold meetings of members or managers or the failure to observe formalities pertaining to the calling or conduct of meetings is not a factor tending to establish that the members have personal liability” if the operating agreement does not require such meetings.
Washington courts apply the corporate piercing case law — examining factors including the entity being a mere instrumentality, undercapitalization, commingling, failure to maintain separate identity, and use of the entity to evade obligations. The leading corporate case is Meisel v. M&N Modern Hydraulic Press Co., 97 Wash. 2d 403, 645 P.2d 689 (1982). Courts approach piercing with skepticism and are unlikely to pierce if other remedies exist.
The statutory carve-out is significant: it protects LLC owners from piercing claims based purely on missed meetings or informal management. But the carve-out is narrow — commingling, undercapitalization, fraud, and alter-ego analysis remain fully available to plaintiffs.
Real Cases from Washington
Morgan v. Burks (Wash., 1980)
Veil pierced — corporation gutted of assets
The Washington Supreme Court pierced the corporate veil where the corporation had been “gutted and left without funds” by those controlling it. The court applied the two-prong test requiring both (1) the corporate form was intentionally used to violate or evade a duty, and (2) disregard of the corporate entity is necessary to prevent unjustified loss to the injured party. This case establishes that stripping a corporation of assets to evade creditors is the quintessential conduct justifying piercing.
What governance records would have changed the outcome: Banking resolutions restricting asset transfers, distribution authorizations documenting proper flows, and annual written consents reviewing financial condition prevent the asset-stripping scenario that justified piercing here. Washington’s meeting-formality carve-out does not protect against this kind of conduct — only documented governance can.
Grayson v. Nordic Construction Co. (Wash., 1979)
Alter-ego framework applied
The Washington Supreme Court applied the alter-ego doctrine, examining whether the controlling individual treated the entity as a genuinely separate business. The court noted a statistical trend to disregard the corporate entity more readily in cases involving close corporations than publicly-held companies. The court interchangeably used the terms “piercing the corporate veil” and “alter ego” to describe the same doctrine.
What governance records would have changed the outcome: Annual written consents, banking resolutions, and single resolutions documenting separate entity governance are the records that establish separateness in close corporation/LLC contexts. The court’s observation that close corporations face higher piercing rates means closely-held LLCs need stronger documentary defenses.
How to Protect Your LLC in Washington
Washington’s statutory carve-out for meeting formalities is helpful but narrow. The big risks — commingling, undercapitalization, asset-stripping, alter-ego operations — remain fully exposed to piercing analysis. The defensive playbook focuses on substantive separateness, not just procedural meetings.
Banking resolutions establish separate financial accounts and authorized signers, addressing the commingling and asset-stripping concerns. Distribution authorizations record that any money taken from the LLC was authorized through formal channels — the documentary defense against the “gutted and left without funds” characterization in Morgan v. Burks. Single resolutions document major decisions in writing. Annual written consents — even though Washington does not require them — provide additional evidence of substantive separateness that goes beyond the carve-out.
Without these records, your personal assets are exposed under Washington’s framework. The meeting-formality carve-out is meaningful protection, but plaintiffs can still build piercing cases on the substantive factors. Minutes.llc generates the governance documents Washington courts examine, signs them with a digital corporate seal, hashes them, and stores them in a private offshore jurisdiction.
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Frequently Asked Questions
Does Washington require LLCs to keep meeting minutes?
No. RCW 25.15.061 explicitly carves out meeting formality failures from the LLC piercing analysis — failure to hold member or manager meetings is not a factor for piercing if the operating agreement does not require such meetings. However, all other piercing factors (commingling, undercapitalization, fraud, alter ego) remain fully available to plaintiffs, making other governance records valuable.
What is the standard for veil piercing in Washington?
Washington has a unique statutory framework. RCW 25.15.061 provides that LLC members are personally liable to the extent corporate shareholders would be in analogous circumstances — but with an explicit carve-out for meeting formality failures. Washington courts apply the corporate framework from Meisel v. M&N Modern Hydraulic Press, examining instrumentality, undercapitalization, commingling, and use to evade obligations. Courts approach piercing “with skepticism.”
Can a single-member LLC be pierced in Washington?
Yes. Washington applies the same statutory framework to single-member LLCs as to multi-member entities. The Morgan v. Burks decision pierced where the corporation was “gutted and left without funds” by those controlling it — the same asset-stripping concern arises with single-member LLCs. The meeting-formality carve-out does not protect against asset-stripping or fraud.
What records protect an LLC from veil piercing in Washington?
While Washington excuses meeting formalities, other governance records remain critical. Banking resolutions maintaining separate accounts, distribution authorizations documenting proper draws, and single resolutions formalizing major decisions create the documented record of separate identity. Annual written consents — while not required — provide powerful evidence of substantive separateness beyond the meeting carve-out.
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 Washington attorney for legal questions specific to your situation.
Related reading: All 50 states — veil-piercing guide · The 7 Risks of LLC Veil Piercing · Why Your LLC Needs a Banking Resolution · Governance Glossary
The Carve-Out Helps. The Substantive Records Protect.
Washington’s meeting-formality carve-out covers procedure, not substance. Banking resolutions, distribution authorizations, and single resolutions defend against the substantive factors that remain fully exposed.
Create Your Record →Additional Washington case law is being compiled and will be added to this page.
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.