Commercial Law, 2012 Bar — Question 50

MULTIPLE CHOICE

X owns 99% of the capital stock of SSS Corporation. X also owns 99% of TTT Corporation. SSS Corporation obtained a loan from VW Bank. On due date, SSS Corporation defaulted. TTT Corporation is financially healthy. Which statement is most accurate? A) X being a controlling owner of SSS Corporation can automatically be held personally liable for the loan of SSS Corporation. B) TTT Corporation, owned 99% by X, can automatically be held liable. C) SSS Corporation and TTT Corporation, although both are owned by X, are two (2) distinct corporations with separate juridical personalities hence, the TTT Corporation cannot automatically be held liable for the loan of SSS Corporation. D) The principle of piercing the veil of corporate fiction can be applied in this case.

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