Explain the Terms Arm's-Length Transaction and Pierce the Corporate Veil

question 109

Essay

Explain the terms arm's-length transaction and pierce the corporate veil.

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Definitions:

Sole Proprietor

The single owner of an unincorporated business, personally responsible for all debts and obligations of the business.

Good Will

The favorable reputation of a business that adds to its value, often considered an intangible asset.

Partnership

A lawful business arrangement involving two or more people who divide management responsibilities and profits.

Business Profits

The earnings of a business after subtracting all expenses from its total revenues, indicating the financial success of the business.