Jill invests $1,000 to buy 10 shares of Good Corporation.The corporation goes bankrupt having no assets and $1 million in liabilities.The most Jill can lose is the $1,000 she invested.This is an example of the corporate characteristic of:

Question

Quizplus · Accepted Answer

This scenario highlights the characteristic of limited liability in a corporation, which means that shareholders are not personally responsible for the corporation's debts and losses beyond their investment. In this case, Jill cannot lose more than the $1,000 she invested even though the corporation has $1 million in liabilities.

Jill Invests $1,000 to Buy 10 Shares of Good Corporation