Tony and Tim Are Shareholders of a Closely Held Corporation

question 59

Multiple Choice

Tony and Tim are shareholders of a closely held corporation that engages in illegal activity.They mixed business and corporate assets regularly.Do Tony and Tim have limited liability?

• A)Yes,because their corporation was closely held.
• B)No,because they used the corporation to engage in illegal and wrongful acts and because they comingled personal and corporate interests.
• C)No,because closely held corporations never benefit from liability protection.
• D)Yes,because of corporation by estoppel.
• E)Yes,because limited liability is absolute.

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Definitions:

Dual Relationships

Situations where a professional, such as a therapist, has multiple roles or relationships with a client, potentially affecting objectivity and professional judgment.

Absolute Answers

Definitive and unalterable solutions or responses that do not allow for ambiguity or variability.

Consultation

The process of seeking expertise or advice from professionals to make informed decisions.

Negative Consequences

Undesired or adverse outcomes resulting from an action or decision.