In the event of legal action, the court will question whether corporate formalities were observed.
The corporation is required to have a board of directors and the board of directors is responsible for overall management of the corporation. Now, that board of directors might consist of just one founder, or it might consist of several individuals, but major corporate decisions need to be approved by the board of directors, and there needs to be a record of that approval.
If the company is leasing an office, if the company is starting a significant product line, or appointing an officer, or borrowing money, any sort of major transaction should be brought to and approved by the board of directors, and there should be a record of that approval, either in minutes of a meeting or so called action by written consent, which is then by signed by all of the directors. And then you have a record of the corporation acting through the Board of Directors.
If, instead, nothing is ever brought to the Board of Directors, and all business is just conducted directly by the individuals acting in the name of the company, there is vulnerability of the corporate shield to challenge because the corporate chain of command has not been followed.