Courts will occasionally determine in a the course of a lawsuit against a corporation that the usual limited liability protections for shareholders will be set aside, imposing liability on individual shareholders or entities that exist behind the corporation. This is called _____.

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Piercing the corporate veil is when the courts determine that the usual separation between a corporation and its shareholders should be disregarded and the shareholders or entities behind the corporation will be held personally liable for the corporation's actions or debts. This can happen if the corporation is found to be operating fraudulently or if the shareholders have not treated the corporation as a separate legal entity. Ultra vires refers to a corporation acting outside the scope of its legal authority, strict foreclosure is a type of foreclosure process, renunciation of a corporation is not a recognized legal concept, and takeover refers to the acquisition of a corporation by another entity.

Courts Will Occasionally Determine in a the Course of a Lawsuit