Shaky Bicycles

question 58

Multiple Choice

Shaky Bicycles.Rhonda,an incorporator who filed the articles of incorporation for ABC Corporation,a corporation set up to sell bicycles,listed the correct town and street but incorrectly put the wrong street number in the document.Helen,a manufacturer of bicycle parts,had sold a number of parts to ABC Corporation.Unfortunately,the corporation was not making any profit,and Helen was not paid in a timely manner.Rhonda told her that the corporation was not liable because it was not validly formed due to the address mistake.Bernice,another creditor of ABC Corporation,also claimed that a shareholder of Shaky Bicycles,Slick,was personally liable to her.Bernice alleged that Slick committed fraud against her when he told her that ABC Corporation was making large amounts of money,that if she would only lend $50,000 to the corporation he would marry her,and that the corporation would make so much money that she would be wealthy in six months.She made the loan,but the corporation has been unable to repay her.Slick told her that he is sorry,but that her only avenue of recovery is through the corporation.Assuming ABC's corporate status is in place,which of the following is Bernice's best theory in order to hold Slick personally liable to her?

• A)That the corporate veil should be pierced because Slick committed fraud through the corporation.
• B)That in equity Slick should be held personally liable.
• C)That Slick should be personally liable because of his status as a shareholder.
• D)That the corporate environment should be removed because Slick committed fraud through the corporation.
• E)None of these.There is no theory under which she could hold Slick personally liable to her.

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Definitions:

Co-leadership

A leadership approach involving two or more people sharing the leadership responsibilities and roles in an organization or project.

Leader-member Exchange Theory

is a concept that explores how leaders develop different relationships with various group members, greatly affecting team dynamics and performance.

Shared Leadership

A leadership style where control and decision-making responsibilities are distributed among members of a group or organization.

Leaders

Individuals who guide or direct a group towards achieving a common goal through influence and direction.