Which Statement Best Describes the Circumstances in Which a Court

question 64

Multiple Choice

Which statement best describes the circumstances in which a court will disregard the separate existence of a corporation and impose liability on a shareholder for obligations owed by the corporation to a creditor? A court will impose liability on a shareholder

• A)when the corporation has breached its contract with the creditor.
• B)when the creditor is an individual who really needs the money, and imposing liability on the shareholder is the only way to ensure that the individual obtains relief.
• C)when a business has been incorporated to do something, or facilitate the doing of something, that is illegal or improper, such as fraud.
• D)when a corporation does not have sufficient assets to meet its reasonably foreseeable liabilities resulting from carrying on its business.
• E)when the court decides in its unfettered discretion that it would be just, fair, and equitable to all parties to do so.

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Definitions:

Topic Sentence

the main idea of a paragraph, usually found at the beginning.

Transitional Expression

Terms or expressions that link ideas, sentences, and paragraphs together, aiding in navigating the reader through the document.

Phosphorus

A chemical element with the symbol P and atomic number 15, essential for life and used in fertilizers, detergents, and other products.

Soda

A carbonated soft drink that is flavored and sweetened. It can also refer to sodium carbonate or bicarbonate.