Final answer:
When misuse of a corporation is identified, courts can invoke a measure known as 'piercing the corporate veil' to hold individuals accountable. This legal action breaches the separation between the corporation and its shareholders or directors for purposes like fraud or evasion of obligations. The correct answer is option: a) 'piercing the corporate veil.
Step-by-step explanation:
When courts find that a corporate organization is being misused, the corporate entity can be disregarded. This has been called piercing the corporate veil. The term refers to a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders or directors. This occurs when a corporation is being used for illegitimate purposes, such as fraud or evasion of legal obligations, and the law sees through the corporate entity to hold the individuals responsible.
Corporate governance is a system meant to supervise the conduct and operation of corporations, but can sometimes fail to prevent misuse. The protection afforded to individual owners, due to the corporation being seen as its own legal entity, is a primary feature of the corporate structure. When legal boundaries are crossed, such as in the case of subverting competition laws, the Sherman Anti-Trust Act or similar legislation may be deployed by the federal government to address the wrongdoings by imposing financial or other penalties.