Which of the Following Is Not a Reason That a Court

question 33

Multiple Choice

Which of the following is not a reason that a court would likely pierce the corporate veil?

• A) A corporation did not follow statutory mandates regarding corporate business.
• B) Shareholders' personal interests and corporate interests are commingled such that the corporation has no separate identity.
• C) Shareholders attempt to commit fraud through a corporation.
• D) A corporation has only de facto status.
• E) A corporation lacks adequate capital when initially formed.

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Definitions:

Allocation

The process of distributing resources or assigning tasks among various projects, units, or individuals.

Recognized Loss

A realized loss on investments or assets reflected in a company's financial statements.

Consolidation Process

The consolidation process involves combining the financial statements of separate companies, typically within the same corporate group, to form a single set of financial statements as if they were one entity.

Subsidiary

A company that is completely or majority-owned by another company, referred to as the parent company, which controls its operations and policies.