Wheelies is an auto parts retailer.It operates a retail megastore in a city where the city ordinance prohibits retailers from being open on consecutive Sundays.The management of Wheelies realizes that their maximum sales happen on Sundays.They create a wholly-owned subsidiary,CarBasics,and start leasing the megastore building and its inventory to CarBasics every alternate Sunday.Who is liable for violating the city ordinance?

Question

Quizplus · Accepted Answer

A court will pierce the corporate veil between Wheelies and CarBasics because the subsidiary CarBasics was created solely to circumvent the city ordinance.Thus,both Wheelies and CarBasics will be liable for violating the city ordinance.

Wheelies Is an Auto Parts Retailer