Question

Rob owns Solar Panels Corporation. He uses Solarl’s funds to pay his personal expenses, creates Thermal Power Inc. to engage in the same business as Solar, transfers Solar’s assets to Thermal, and petitions Solar into bankruptcy. This activity could likely warrant _______.

Answer 1

The correct answer to the following question is a piercing of the corporate veil .

Step-by-step explanation:

The piercing of corporate veil can be described as a situation where court will put aside the limited liability of a shareholder aside and hold him (corporate shareholder or director etc) accountable for the company's debt or actions. This is most commonly found in the cases where a corporation is getting closed. The given case in the question where Solar panels corporation has filed for bankruptcy , here Rob would be held accountable for the debt and bankruptcy of the company.