Which of the following statements about the organization of firms is true?
A) Owners of a corporation have unlimited liability.
B) Corporations have limited access to money markets.
C) Owners of a corporation are not personally liable for the firm's actions, though its directors may be.
D) Partnerships are the most common form of business organization in Canada.
E) Crown corporations are never interested in increasing profits because they have other goals.

Question

Quizplus · Accepted Answer

This statement is true. In a corporation, the owners (shareholders) are not personally liable for the firm's actions. If the corporation goes bankrupt or is sued, the owners can only lose the amount they invested in the company, but no more. However, the directors of the corporation may be held personally liable if they acted negligently or illegally.

Which of the Following Statements About the Organization of Firms