Which principle refers to the corporate entity used to commit fraud or justify wrongdoing?

The principle that refers to the corporate entity being used to commit fraud or justify wrongdoing is the alter ego theory. This legal concept allows courts to disregard the separate legal personality of a corporation when the entity is being used as a shield to undertake improper actions, such as fraud or wrongful conduct. When there is a strong indication that the corporation is merely an instrumentality of the individuals controlling it, and thus not acting independently, the court may hold those individuals liable for the corporation's actions.

The alter ego theory effectively aims to prevent injustice by ensuring that individuals cannot exploit the corporate structure to evade accountability for their actions. It emphasizes the importance of maintaining the integrity of the corporate form and prevents misuse that could lead to harm or damage to third parties. This theory is often invoked in piercing the corporate veil cases, where the corporate entity is not treated as a separate legal person in instances of misuse or fraud.

In contrast, the other principles listed do not pertain to this specific context. The business judgment rule provides protection to directors in making decisions in the best interests of the company, the public convenience rule relates to regulatory considerations, and the right of succession rule pertains to the transfer of interests in a business entity upon the death of a partner or shareholder. These do