Which of the following statements is incorrect?
A) Sole proprietorships are subject to less regulation.
B) Both angel investors and venture capitalists exchange capital for ownership.
C) Shareholders are responsible for paying off the corporate bonds in the event of a bankruptcy.
D) All of these choices are correct.

Question

Quizplus · Accepted Answer

Shareholders are not directly responsible for paying off corporate bonds in the event of a bankruptcy. This responsibility falls to the corporation itself. If the corporation's assets are liquidated, the proceeds go first to secured creditors, then to unsecured creditors, and only if anything is left do shareholders receive anything.

Which of the Following Statements Is Incorrect