A court's holding that a corporation was organized solely to avoid liability is known as "piercing the corporate veil".

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Piercing the corporate veil refers to a legal decision where a court sets aside limited liability and holds a corporation's shareholders or directors personally liable for the corporation's actions or debts. This often occurs when the corporation is found to have been used as a tool to commit fraud or wrongdoing, or when it is essentially an alter ego of its shareholders, designed primarily to avoid liability.

A Court's Holding That a Corporation Was Organized Solely to Avoid