You paid $10,000 to buy 1% of the stock in a corporation that is now bankrupt.The company owes $10 million dollars to its creditors.As a result of the bankruptcy,you are responsible for paying $100,000 (or $10 million × 1%)of the amount owed to the creditors.

Question

Quizplus · Accepted Answer

Unlike sole proprietorships and partnerships,a corporation is a separate entity from both legal and accounting perspectives.This means that a corporation,not its owners,is legally responsible for its own taxes and debts.

You Paid $10,000 to Buy 1% of the Stock in a Corporation