Vermont Bar Exam (UBE — MBE Component)

When will a court most likely pierce the corporate veil and hold shareholders personally liable?

Whenever the corporation is insolvent When the corporation fails to hold annual shareholder meetings When the corporate form is used as a sham or to perpetrate fraud, and there is such unity of interest that the corporation and shareholder are indistinguishable Whenever the corporation has fewer than three shareholders

Correct Answer:

When the corporate form is used as a sham or to perpetrate fraud, and there is such unity of interest that the corporation and shareholder are indistinguishable

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