B is corrent. The requirement is to identify the circumstances that would most likely cause the court to pierce the corporate veil. Piercing the corporate veil may occur when the corporation is used to perpetrate fraud (e.g., forming an undercapitalized corporation), the owners and officers do not treat the corporation as a separate entity, shareholders commingle assets, or corporate formalities are not followed. The concept of piercing the corporate veil is designed to protect creditors. Therefore, B is corrent because using corporate assets for owner’s personal purposes involves commingling of assets.
A is incorrect. The requirement is to identify the circumstances that would most likely cause the court to pierce the corporate veil. Piercing the corporate veil may occur when the corporation is used to perpetrate fraud (e.g., forming an undercapitalized corporation), the owners and officers do not treat the corporation as a separate entity, shareholders commingle assets, or corporate formalities are not followed. The decision where to conduct business is a matter of discretion for the corporate officers or the board of directors; it is not a basis for piercing the corporate veil. The concept of piercing the corporate veil is designed to pr
C is incorrect. The requirement is to identify the circumstances that would most likely cause the court to pierce the corporate veil. Piercing the corporate veil may occur when the corporation is used to perpetrate fraud (e.g., forming an undercapitalized corporation), the owners and officers do not treat the corporation as a separate entity, shareholders commingle assets, or corporate formalities are not followed. The decision where to conduct business is a matter of discretion for the corporate officers or the board of directors; it is not a basis for piercing the corporate veil. The concept of piercing the corporate veil is designed to pr
D is incorrect. The requirement is to identify the circumstances that would most likely cause the court to pierce the corporate veil. Piercing the corporate veil may occur when the corporation is used to perpetrate fraud (e.g., forming an undercapitalized corporation), the owners and officers do not treat the corporation as a separate entity, shareholders commingle assets, or corporate formalities are not followed. The decision where to conduct business is a matter of discretion for the corporate officers or the board of directors; it is not a basis for piercing the corporate veil. The concept of piercing the corporate veil is designed to pr
|
