The retail card and gift shop chain that Heidi started has been incorporated.Which of the following best describes the limited liability that Heidi has as the primary stockholder in this corporation?
A) Heidi has no responsibility if the business fails and will still be able to get her initial investment back.
B) Heidi may have to give up her car and house if the corporation fails in order to cover the debts of the corporation.
C) The other stockholders will be able to seize Heidi's personal money but not her primary residence in the event that the business fails.
D) Heidi's personal assets will be protected in the event that the corporation fails, although she could lose her entire investment.
E) Heidi will only be liable for losses that develop from decisions she made about the daily business operations.

Question

Quizplus · Accepted Answer

By incorporating her business, Heidi has limited her personal liability. This means that her personal assets, such as her car and house, will not be at risk in the event that the corporation fails. However, she may still lose her entire investment in the business if it fails. Additionally, if there are any losses that result from decisions Heidi made regarding the daily operations of the business, she may be held responsible for those specific losses.

The Retail Card and Gift Shop Chain That Heidi Started