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Questions and Answers
What is the purpose of veil-piercing doctrines?
What is the purpose of veil-piercing doctrines?
- To hold shareholders directly liable for corporation's obligations (correct)
- To provide limited liability to corporations
- To encourage shareholders to take risks with creditor funds
- To protect shareholders from creditors' claims
Why are creditors vulnerable to misbehavior by shareholders and limited liability corporations?
Why are creditors vulnerable to misbehavior by shareholders and limited liability corporations?
- Shareholders have an incentive to take risks with creditor funds (correct)
- Creditors lack legal protection
- Shareholders are not responsible for creditor funds
- Limited liability corporations are not regulated
What is the equitable power of courts in relation to veil-piercing?
What is the equitable power of courts in relation to veil-piercing?
- To protect shareholders from liability
- To enforce corporate distribution statutes
- To set aside the entity status of the corporation (correct)
- To regulate shareholder claims
What do fraudulent conveyance laws protect creditors from?
What do fraudulent conveyance laws protect creditors from?
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What are the four types of protection mentioned for creditors?
What are the four types of protection mentioned for creditors?
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