Which of the following statements is true of the corporate form of business?
A)A corporation is organized understate law as a separate legal entity.
B)Changes in the ownership of stock has a negative effect on the continuity of the corporation.
C)Any stockholder may commit the corporation to a contract.
D)It is easy for stockholders to lodge an effective protest against management.

Question

Quizplus · Accepted Answer

The corporate form of business is organized under state law as a separate legal entity, meaning that the corporation is distinct from its owners or shareholders. This provides limited liability protection for shareholders and allows for perpetual existence, even if ownership changes. Choices B, C, and D are all incorrect as they do not accurately describe the features of a corporation.

Which of the Following Statements Is True of the Corporate