What does it mean to pierce the corporate veil quizlet? | CHURINGA BODY JEWELRY REVIEWS

Piercing the Corporate Veil. A legal theory in every state that allows creditors of the corporation to move past the corporation, and its liability shields, and go directly to the personal assets of the officers, directors, and shareholders of the corporation.

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Correspondingly, what is piercing the corporate veil Why is it important?

A key reason that business owners and managers choose to form a corporation or limited liability company (LLC) is so that they won’t be held personally liable for debts should the business be unable to pay its creditors. … When this happens it’s called “piercing the corporate veil.”

Regarding this, which of the following causes the corporate veil to be pierced quizlet? Someone may try to pierce the corporate veil when there isn’t enough money in the corporate bank accounts to cover monetary damages potentially awarded by a court.

Beside this, in which of the following situations might a court pierce the corporate veil?

There are three recurring situations in which the corporate veil is often pierced: (i) when corporate formalities are ignored and injustice results; (ii) when the corporation is inadequately capitalized at the outset; and (iii) to prevent fraud.

What are 4 circumstances that might persuade a court to pierce the corporate veil?

(1) compete with the corporation, or otherwise usurp (take personal advantage of) a corporate opportunity, (2) have an undisclosed interest that conflicts with the corporation’s interest in a particular transaction, Directors and officers must fully disclose even a potential conflict of interest.

What is corporate veil in simple terms?

A legal concept that separates the personality of a corporation from the personalities of its shareholders, and protects them from being personally liable for the company’s debts and other obligations.