Question

Corporate stockholders are not responsible for the debts of the corporation. This is MOST LIKELY an example of

A) dividends.
B) partnerships.
C) limited liability.
D) unlimited liability.

Answer 1

This is an example of Limited liability.

A stockholder, is any person/company/institution that owns at least one of the shares that bigger company has as stock. In this way the stockholders are the owners of the company too, so they enjoy the benefits of the company success. But when it comes to debts, they have a limited liability since the debts are part of the consequences of company investments´ management.