Which of the following can be used to pierce the corporate veil? Group of answer choices adequate capitalization alter ego theory formation of the corporation to avoid personal liability

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13-07-2022
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Which of the following can be used to pierce the corporate veil? Group of answer choices adequate capitalization alter ego theory formation of the corporation to avoid personal liability

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sharmaaashutosh169 sharmaaashutosh169 · Answer 1 · 2022-07-20T12:33:59+02:00

The answer is adequate capitalization.

In legal terms, piercing the Corporate Veil refers to a circumstance in which the court lifts limited liability and holds the corporation's owners and/or directors personally liable for the corporation's debts or acts. In many ways, the idea violates the widely held belief that a corporation is an autonomous legal entity with full accountability for its debt as well as the advantages arising from credit provided to it.

The Corporate Veil is a barrier that shields members from the company's actions. Simply put, if a firm breaches a law or incurs obligation, its members cannot be held accountable.

Hence , the correct option is adequate capitalization.

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