If the owners of a corporation don't file their annual paperwork, neglect to pay their annual fees, or commit fraud, a court could ignore the fact that a corporation has been established and the owners could be held personally liable for the actions of the corporation. This chain of effects is referred to as:
A) vacating the corporate status
B) yielding the corporate privilege
C) surrendering the corporate shield
D) piercing the corporate veil
E) capitulating the corporate doctrine

Question

Quizplus · Accepted Answer

The chain of effects described in the question is known as "piercing the corporate veil." This refers to a legal concept in which the protection of limited liability afforded by the corporate structure is disregarded, allowing courts to hold individual shareholders, directors, or officers of a corporation personally liable for the corporation's debts or wrongful actions. This usually occurs when the corporation is being used to perpetrate fraud, commit a crime, or as a mere instrumentality of the shareholders.

If the Owners of a Corporation Don't File Their Annual