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

Question

Quizplus · Accepted Answer

As the primary stockholder in the incorporated company, Bria's personal assets will be protected in the event that the corporation fails. However, she could lose her entire investment in the company. This is because a corporation is a separate legal entity from its owners, so the owners (or shareholders) have limited liability for the company's debts and losses. In other words, Bria's personal assets are not at risk if the corporation fails, but she could lose the money she invested in the company.

The Retail Card and Gift Shop Chain That Bria Started