Corporate shareholders:
A)are proportionately liable for the firm's debts.
B)are protected from all losses.
C)have the ability to change the corporation's bylaws.
D)receive tax-free distributions since all profits are taxed at the corporate level.
E)have basically no control over the actual corporation.

Question

Quizplus · Accepted Answer

Corporate shareholders have the ability to change the corporation's bylaws through voting in shareholder meetings. They do not have personal liability for the firm's debts and are generally protected from losses (unless they have invested in stock options or have taken on personal guarantees). However, they do not receive tax-free distributions as corporate profits are taxed at the corporate level. While they do not have complete control over the actual corporation, they can influence major decisions through their voting power.

Corporate Shareholders