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9 January, 10:07

Tony is the sole shareholder of O. K. Oil Corporation. Tony uses O. K's funds to pay his personal expenses and to create Pure Fuel Corporation to engage in the same business as O. K. Oil. He then transfers all of O. K. Oil's assets to Pure Fuel. Tony then files/petitions O. K. Oil into bankruptcy. These actions would most likely cause:a. a bonus to Tony for financial maneuvers b. a discharge for O. K. in bankruptcy c. a pierce of the corporate veil. d. a review of Pure Fuel's articles of incorporation

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  1. 9 January, 10:31
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    Answer: C

    A pierce of corporate veil

    Explanation:

    A business is expected to have a separate body that is distinct from that of its owner or owners. In the above scenario, Tony does not take the business as a separate entity and as such he can be charged for piercing the corporate veil of O. K. Oil Corporation on the following grounds.

    Failure to maintain the separate identities of the companies.

    Failure to maintain separate identities of the company and its owners or shareholders.
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Home » Business » Tony is the sole shareholder of O. K. Oil Corporation. Tony uses O. K's funds to pay his personal expenses and to create Pure Fuel Corporation to engage in the same business as O. K. Oil. He then transfers all of O. K. Oil's assets to Pure Fuel.
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