What is the most likely effect if a court pierces the corporate veil?
A. The corporation’s shareholders can be assigned liability for the corporation’s debts.
B. The corporation can lose its tax-exempt status.
C. The corporation can be held liable for acts of nonofficer employees of the corporation.
D. The corporation can be held liable for acts of the directors.
Answer:A
A is corrent. The requirement is to identify the most likely effect if a court pierces the corporate veil. The most likely effect is that shareholders will be assigned liability for corporate debts.
B is incorrect because corporations generally do not have tax-exempt status.
C is incorrect because the corporation can always be held liable for acts of nonofficer employees within the normal scope of duties.
D is incorrect because the corporation can always be held liable for acts of the directors within their normal scope of duties.