Which of the following statements is a defining feature of a corporation?
A)The owners of a corporation face unlimited liability on debts.
B)A corporation owns and operates units in foreign countries.
C)A corporation is created by a verbal agreement.
D)A corporation that is based on a verbal agreement is also recognized by State law.
E)A corporation has a legal identity that is separate from that of its owners.

Question

Quizplus · Accepted Answer

The defining feature of a corporation is that it has a separate legal identity from its owners, also known as limited liability. This means that the corporation can incur debts and legal obligations, but the owners are not personally responsible for them beyond their investment in the company. Choices A, B, C, and D are not defining features of a corporation.

Which of the Following Statements Is a Defining Feature of a Corporation