Jim Incorporated His Small Business So That He Would Obtain

question 30

Multiple Choice

Jim incorporated his small business so that he would obtain limited liability on company indebtedness.But when he applied for a bank loan,the bank insisted that he give a personal guarantee for the loan made to the corporation.Has the incorporating of the business helped Jim as far as limiting his business liability?

• A)No,it has not,since all venders and creditors will be more leery about extending credit.
• B)Yes,it has,because it might help in other types of liability,such as product liability.
• C)No,it has not,because bankers become more cautious when they see individuals incorporate just to avoid personal liability.
• D)No,it has not,because personal guarantees are required either way.
• E)Yes,it has,because the bank has more confidence in issuing his company the loan.

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A cognitive behavioral strategy used to challenge and change negative or irrational attributions that individuals make about events affecting them.

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The process of considering different options or approaches before making a decision or solving a problem.