Which of the following is true with regard to the characteristics of corporations?
A)The shareholders would be vicariously liable for any damage caused by a employee of the corporation carrying out his or her duties.
B)The corporation is a separate legal person,but neither can sue nor be sued.
C)Directors are responsible for the shareholders of the corporation.
D)Shareholders are liable for the debts and other obligations of the corporation.
E)A shareholder's liability is limited to the amount he or she paid for the shares.

Question

Quizplus · Accepted Answer

The characteristic of limited liability means that a shareholder's liability is limited to the amount they paid for their shares. A and D are incorrect because shareholders are not vicariously liable for an employee's actions and they are not personally liable for the corporation's debts and obligations. B is incorrect because corporations can sue and be sued, and C is incorrect because directors are responsible for managing the corporation, not individual shareholders.

Which of the Following Is True with Regard to the Characteristics