Apply It: Corporate Formation

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If Lakes Express is attempting to receive payment from the extra assets of a shareholder, it would be asking the court to pierce the corporate veil $-$

$.$ Courts will ignore the corporate structure and make the shareholder$-$owners personally liable when the corporate structure is select answer for personal benefit or when the corporate form is select answer from the controlling shareholder.

In this situation, it select answer that Lakes Express was tricked into dealing with the corporation instead of the individual. Given the life of the corporation, it select answer that the corporation was set up to always be insolvent, or was undercapitalized. It also select answer that the corporation was formed to evade a legal obligation. There select answer evidence that the corporate formalities were not followed and there select answer evidence that Toby $$olo commingled funds. Given these facts, a court select answer pierce the veil of Solo Services, Inc., and hold Toby Solo personally responsible for the