Martha and Wendy start a cookie shop and the business is organized as a corporation. Because of poor planning the business goes bankrupt and the corporation's debt is $30,000. Martha has $30,000 in savings and Wendy has $80,000 in savings. Martha must pay ________ of the debt and Wendy must pay ________ of the debt.

Question

Quizplus · Accepted Answer

In a corporation, shareholders (like Martha and Wendy) have limited liability, meaning they are not personally responsible for the corporation's debts. Therefore, neither Martha nor Wendy is required to pay the corporation's debt from their personal savings.

Martha and Wendy Start a Cookie Shop and the Business