Under the corporate form of business organization
A) ownership rights are easily transferred.
B) a stockholder is personally liable for the debts of the corporation.
C) stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation.
D) stockholders wishing to sell their corporation shares must get the approval of other stockholders.

Question

Quizplus · Accepted Answer

Under the corporate form of business organization, ownership rights are easily transferable through the buying and selling of shares. Stockholders can sell their shares to other investors without affecting the continuity of the business operations.

B) is incorrect because one of the main advantages of the corporate form of business is limited liability. Shareholders are not personally liable for the debts of the corporation beyond their investment in the company.

C) is partially correct, as certain actions by stockholders, such as voting on major corporate decisions, can bind the entire corporation. However, individual stockholders cannot bind the corporation through their own personal acts.

D) is incorrect as stockholders do not need approval from other shareholders to sell their shares. They may need to comply with certain regulations or restrictions outlined in the corporation's bylaws or shareholder agreements.

Under the Corporate Form of Business Organization