If a shareholder receives watered stock, they cannot be held personally liable.

Name: If a shareholder receives watered stock, they cannot be held personally liable.
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Question

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Watered stock refers to shares issued by a company for a value much greater than the asset or cash value it receives, which can lead to situations where shareholders might be held personally liable to creditors for the difference if the company cannot cover its debts.

If a Shareholder Receives Watered Stock, They Cannot Be Held