Courts Have Responded by Piercing the Veil When the Shareholders

question 74

Multiple Choice

Courts have responded by piercing the veil when the shareholders have:

• A)not followed the formalities of corporate procedures.
• B)not provided an adequate financial basis for the business.
• C)used the corporation to defraud.
• D)All of the above.
• E)(a) and (c) only.

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Definitions:

Perquisites

Special nonmonetary benefits given to executives; often referred to as perks

Country Club Membership

Affiliation with a private club offering recreational sports and social activities, often including access to golf courses and dining facilities.

Former CEO

An individual who previously held the chief executive officer position in a company, responsible for strategic decision-making and overall management.

Lump-sum Merit Pay

A one-time payment awarded to an employee for exceptional performance, rather than an ongoing salary increase.