If a corporate entity is disregarded by officers or directors so that there is such a unity of ownership and interest that separateness of the corporation has ceased to exist, the corporate veil may be pierced based on the:
A) alter-ego theory.
B) negligent conduct theory.
C) corporate confusion theory.
D) corporate envelopment theory.
E) corporate doppelganger theory.

Question

Quizplus · Accepted Answer

The alter-ego theory, by which the corporate veil can be pierced, may also be used to impose personal liability upon corporate officers, directors, and stockholders. If the corporate entity is disregarded by these officials themselves, so that there is such a unity of ownership and interest that separateness of the corporation has ceased to exist, the alter-ego theory will be followed and the corporate veil will be pierced.

If a Corporate Entity Is Disregarded by Officers or Directors