Shareholders of a corporation:
A) receive one vote for each share of stock they own.
B) have unlimited liability.
C) have mutual agency.
D) receive dividends from the corporation without having to pay tax on the distribution.

Question

Quizplus · Accepted Answer

Shareholders of a corporation receive one vote for each share of stock they own. This is a fundamental principle of corporate governance and allows shareholders to have a say in the decision-making processes of the company. Unlimited liability (B) refers to the legal responsibility of a person or entity for all debts and obligations of a business, which is not a characteristic of shareholders in a corporation. Mutual agency (C) refers to the ability of partners in a partnership to act on behalf of each other, which is also not applicable to shareholders in a corporation. Finally, while shareholders receive dividends from the corporation, they are subject to tax on the distribution, so option (D) is also incorrect.

Shareholders of a Corporation