Which of the following is true of companies? All companies:
A) are limited liability companies.
B) are separate legal entities.
C) have a limited life.
D) are bound by the contracts signed by shareholders.

Question

Quizplus · Accepted Answer

Companies are separate legal entities, meaning that they are distinct from their owners (shareholders) and have their own legal rights and liabilities. They can enter into contracts, own property, and sue or be sued in their own name. This concept of "limited liability" limits the personal liability of the shareholders to the amount of their investment in the company. Companies can have a limited or unlimited life span, depending on their structure and legal requirements. Companies are not necessarily all "limited liability companies" (a specific legal structure with a certain set of requirements), and they are not bound by the contracts signed by their shareholders.

Which of the Following Is True of Companies? All Companies