In many states,the minimum amount that stockholders must contribute to the corporation,and which is intended to protect the creditors of the corporation,is called the:
A)Par value of preferred.
B)Minimum legal capital.
C)Premium capital.
D)Stated value.
E)Working capital.

Question

Quizplus · Accepted Answer

The minimum amount that stockholders must contribute to the corporation, which is intended to protect the creditors of the corporation, is called the minimum legal capital. This minimum legal capital is often a nominal amount, such as $1 per share, and is set by state law. It is important for creditors because it ensures that there is a minimum level of assets available to pay them in case the corporation fails. The other options listed are not related to this concept.

In Many States,the Minimum Amount That Stockholders Must Contribute to the Corporation,and