A Parent Corporation Will Be Liable to Creditors of a Subsidiary

question 12

Multiple Choice

A parent corporation will be liable to creditors of a subsidiary corporation:

• A) only if the parent corporation owns more than 50% of the shares in the subsidiary corporation
• B) only if the parent corporation and the subsidiary corporation have exactly the same directors
• C) only if the parent corporation owns 100% of the shares in the subsidiary corporation
• D) only if the subsidiary corporation is a private (non- distributing) corporation
• E) none of the above

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Definitions:

Revoked

The withdrawal, cancellation, or annulment of a right, privilege, license, or decision, often by a competent authority.

Fixed Terms

Fixed terms refer to conditions or clauses in a contract or agreement that are set and cannot be changed without the consent of all parties involved.

Business

An organization or enterprising entity engaged in commercial, industrial, or professional activities.

Contract Terms

Specific provisions or conditions outlined in a contract that define the rights, duties, and obligations of the parties involved.