Last Tuesday you purchased 100 shares of Jitters Coffee Company, a corporation, for $25.00 per share. Unfortunately, the company went bankrupt later that same day. If the company still owed $1 million in debts after all assets have been liquidated and there are 1 million stockholders, what would be your personal loss from the remaining debt?

Question

Quizplus · Accepted Answer

As a shareholder in a corporation, your liability is limited to the amount you invested. You would lose the $2,500 you invested in the shares, but you are not responsible for the company's debts beyond that.

Last Tuesday You Purchased 100 Shares of Jitters Coffee Company