A corporation possesses all but one of the following characteristics.Which of the following is NOT a characteristic of a corporation?
A) If a corporation cannot pay its debts, lenders can take the owners' personal assets to satisfy the obligations.
B) A corporation is a distinct entity in the eyes of the law.
C) Corporation ownership is divided into shares of stock.
D) A corporation is owned by shareholders or stockholders.

Question

Quizplus · Accepted Answer

This statement is not true. A corporation is a separate legal entity, so the owners' personal assets are not at risk if the corporation cannot pay its debts. Only the corporation's assets are at risk. This is known as limited liability, which is a key characteristic of a corporation.

A Corporation Possesses All but One of the Following Characteristics