Which of the following is the reason why alter ego companies come under the purview of piercing the company veil?
A) because the company has no decision-making power independent of its parent company
B) because the company had insufficient capital when being formed
C) because the shareholders use company assets for personal benefit
D) because the shareholders of that company assumes personal liability

Question

Quizplus · Accepted Answer

Alter ego companies are those that are created to serve as a mere extension or puppet of its parent company. The shareholders of these companies often use the company's assets for personal benefit or to shield themselves from liability. Such actions make it easier to pierce the company veil to hold the shareholders personally liable for the debts and actions of the company. Therefore, option C is the correct answer.

Which of the Following Is the Reason Why Alter Ego