Question
XYZ CORP. IS CREATED BY JOHN GOTCHA FOR THE PURPOSES OF FINDING INVESTORS TO PUT MONEY INTO A MUTUAL FUND.XYZ CORP. STARTS OUT WITH $500.00
XYZ CORP. IS CREATED BY JOHN GOTCHA FOR THE PURPOSES OF FINDING INVESTORS TO PUT MONEY INTO A MUTUAL FUND.XYZ CORP. STARTS OUT WITH $500.00 IN THE BANK. JOHN, THROUGH XYZ CORP., FINDS FIVE INVESTORS WHOSE INVESTMENTS TOTAL $5 MILLION DOLLARS. JOHN DEPOSITS THE MONEY INTO HIS COPORATE BANK ACCOUNT. JOHN THEN BEGINS TO WRITE CORPORATE CHECKS TO HIMSELF AND DEPOSITS THE CHECKS ON HIS PERSONAL ACCOUNT. HE EVENTUALLY TRANSFERS ALL $5 MILLION TO HIMSELF FOR PERSONAL USE. THE INVESTORS WHO SUE JOHN:A)Are out of luck because corporations are separate fictitious entities and shareholders have limited liabilityB)Are out of luck because they paid the money to the corporationC)May be able to pierce the corporate veil and go after John personallyD)None of the Above
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