Which of the following is a characteristic of a corporation?
A)A corporation is owned by stockholders.
B)Lenders of a corporation do not have the right to claim the corporation's assets to satisfy their obligations.
C)All shares of a corporation must be held by a single individual.
D)Each stockholder has the authority to commit the corporation to a binding contract through his actions.

Question

Quizplus · Accepted Answer

A corporation is a separate legal entity that is owned by its stockholders (also known as shareholders). They provide the company with capital in exchange for ownership in the form of shares of stock.

Option B is incorrect as lenders can claim the corporation's assets in case of default.

Option C is incorrect as the shares of a corporation can be held by multiple individuals or even other entities such as other corporations or trusts.

Option D is also incorrect as the authority to commit the corporation to binding contracts lies with the board of directors and officers of the corporation, not individual stockholders.

Which of the Following Is a Characteristic of a Corporation