Fred and Barney have incorporated and obtained a $100,000 loan, payable with interest over five years, in the corporate name. After paying on the loan regularly for two years, the business falters due to the economy, and they default on their loan. Their business has no assets.
A) Fred and Barney are jointly and severally liable for the entire balance.
B) Fred and Barney are each individually liable for one quarter of the debt, with the corporation liable for the remaining half.
C) Fred and Barney are each individually liable for one-third of the debt, with the corporation liable for the remaining third.
D) Fred and Barney have no personal liability for the debt.
Correct Answer:
Verified
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