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/her actions.

Question

Quizplus · Accepted Answer

A corporation is a separate legal entity that is owned by one or more stockholders. The stockholders have limited liability and their ownership is represented by shares of stock.

Answer: B
 Lenders of a corporation have limited recourse to the corporation's assets, typically up to the amount of the loan. They do not have the right to claim the corporation's assets beyond this amount to satisfy their obligations.

Answer: C
 This statement is incorrect. A corporation can have multiple stockholders, and the shares can be owned by individuals or other entities.

Answer: D
 This statement is incorrect. Only the board of directors or authorized officers of the corporation have the authority to commit the corporation to a binding contract on behalf of the company. Individual stockholders do not have this authority.

Which of the Following Is a Characteristic of a Corporation