In Which of the Following Situations Would a Court Likely

question 91

Multiple Choice

In which of the following situations would a court likely to pierce the corporate veil?

• A)Shareholders attempt to commit fraud through a corporation.
• B)A corporation followed statutory mandates regarding corporate business.
• C)Shareholders' personal interests and corporate interests are separate.
• D)A corporation had adequate capital when it initially formed.
• E)None of the above; because a corporation is a legal entity separate from its owners (i.e.,its shareholders),a court cannot pierce the corporate veil in order to impose personal liability on shareholders.

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Definitions:

Equity Returns

The profit or loss generated on an investment in equity, represented as a percentage of the investment's initial cost.

Interest

The charge for borrowing money, typically expressed as an annual percentage rate.

Debt Investments

Financial instruments that represent a loan made by an investor to a borrower, typically used by corporations, municipalities, and sovereign governments to finance projects and operations.

Return

The payment to an investor for the use of funds. Usually expressed as a percent of the investment.