Question

The growth of business led to the development of a new type of business organization called the corporation. Which of the following was a characteristic of a corporation?

A. Each of the company’s stockholders was legally responsible if the company went bankrupt.

B. Only the owner of the company was legally responsible if the company went bankrupt.

C. None of the company’s stockholders was legally responsible if the company went bankrupt.

D.The federal government was legally responsible if the company went bankrupt.

Answer 1

The correct answer is C. None of the company’s stockholders was legally responsible if the company went bankrupt.

Since there are many people who own stocks and who own a part of the company, it is impossible to just pinpoint and accuse one person for everything.