Shareholders do have the protection of limited liability, but in most insolvent companies, ordinary shareholders receive little or nothing back on winding up. Shareholders do not have a legal entitlement to be paid a dividend once a year; their entitlement to receive dividends is dependent on the company's financial performance and the decision of the board of directors.

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It Is True That

Question 18

Multiple Choice

It is true that:

A) shareholders have the protection of limited liability.
B) in most insolvent companies, ordinary shareholders receive little or nothing back on winding up.
C) shareholders have a legal entitlement to be paid a dividend once a year.
D) Both A and B.

Correct Answer: