Which Statement Best Describes the Circumstances in Which a Court

question 29

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.The business is being used as a cloak for a fraudulent or illegal purpose.
• 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:

Tabula Rasa

A theory suggesting that individuals are born without built-in mental content, and all knowledge comes from experience or perception.

Associative Learning

A learning process in which a new experience is connected with a previously unrelated stimulus, leading to a change in behavior.

Classical Conditioning

An educational process where two signals are consistently linked together; initially, the response is triggered by the second signal but over time, it starts being triggered by the first signal alone.

Associative Learning

The process by which an individual learns to connect two stimuli or a behavior and its consequence, forming new knowledge.