Which of the following is a good strategy to prevent the piercing of the corporate veil...

Which of the following is a good strategy to prevent the piercing of the corporate veil between a parent company and its subsidiary?

Transactions between them should happen at fair value.
Records of transactions should be maintained only by the parent company.
Assets should be bought only in the name of the subsidiary.

Expert Solution

Intercompany transactions should be fair is the good strategy among all of the following.

Explanation:-

1.Intercompany transactions should be fair:-It means that if a subsidiary co. Uses the server arrangement of yhe parent co. It should be documented in intercompany service arrangement and subsidiary co. Should pay reasonalble compensation to that. Intercompany transations should be fair because courts have considered the intercompany transactions are fair or not.

2.Record of transactions should be maintained only by parent co.:-it is wrong to record all transactions by parent co. Subsidiary co. record its own transactions and prepare financial statements while parent co. record its own transactions and prepare its financial statements it also prepare consolidated financial statements.

3.Assets should be bought only in the name of the subsidiary:-It is also wrong to buy asset only in the name of subsidiary because it shows that the assets used by holding co. are on the name of subsidiary then both co. are same so the assets of subsidiary co. bought on the name of subsidiary and the assets of parent co. should buy on the name of parent co.

ekkarill92 answered 1 year ago

Whole Foods is a good example of a company which practices the good corporate culture to establish a good strategy execution process.

Whole Foods is a good example of a company which practices the good corporate culture to establish a good strategy execution process. The purpose of the company is to provide people with high quality organic products. This lighten up the values, principles and ethical goals of the company which is to provide safe foods to their consumers. This purpose of the company boost up the energy of their interdependent stakeholders and as a result makes their employees more efficient at...

1. When will a court pierce the corporate veil?

1. When will a court pierce the corporate veil?a. When there may have been a defect in the incorporation process. b. When there is domination of the corporation by one or more of its shareholders c. When the domination of the corporation results in an improper purpose d.Whenever there a single-shareholder-owned or closely held corporation which did not file an annual statement with the Secretary of State. 2. Which of the following is reported on Form 8-K? a.audited...

A court will pierce the corporate veil of a corporation when the corporate privilege is abused for personal benefit.

QUESTION 5A court will pierce the corporate veil of a corporation when the corporate privilege is abused for personal benefit.TrueFalseQUESTION 6As a general rule, shareholders are responsible for the daily management of a corporation.TrueFalse

What is the problems for third parties from the existence of the corporate veil?

What are some of the factors that cause the courts to pierce the corporate veil? What...

What are some of the factors that cause the courts to pierce the corporate veil? What was the contract between Dog House Investments, Inc. and Teal Properties, Inc.? How was it breached? When Dog House Investments, Inc. was not reimbursed it caused severe financial duress. Does this consequence make the landlord’s conduct unethical? Explain. What is the standard for an award of punitive damages for a contract breach? Was the standard met in this case? How might this suit have...

Corporate strategy

Valerie is the CEO of an automaker and wants to ensure that her corporate strategy is leading to processes and behaviors that will foster a strong financial performance. Based on what you know about the flow of organizational culture, which of the following acts does NOT directly tie corporate strategy to performance? a. changing the company’s organizational structure to more closely align with its structure b. developing a control system that provides feedback on whether the strategy is working...

We take up first the question of whether the trial court erred in piercing the corporate...

We take up first the question of whether the trial court erred in piercing the corporate veil of On Top to hold Russell Nugent personally liable on plaintiffs' claims. Shareholder insulation from liability for corporate debts or obligations has been a cornerstone of corporate law in the United States since the 19th century. . Although courts will look through corporate organizations to individuals when necessary to prevent injustice, doing so is the exception rather than the rule, and, ordinarily, a...

Question