Regarding Corporations,which Statement Follows the Principle of Limited Liability

question 50

Multiple Choice

Regarding corporations,which statement follows the principle of limited liability?

• A)a director who drives dangerously and causes an accident while on company business
• B)shareholders of a small,private company provide security or personal guarantees on loans made to their company
• C)a corporation is liable for its own debts
• D)the trustee in bankruptcy requires shareholders to repay corporate property received prior to bankruptcy
• E)a dividend is paid to a shareholder although the corporation make no profits-the shareholder is liable for the corporation's debt to the extent of the dividend

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Definitions:

Maker

A person or entity that creates or manufactures something.

Deposit Slip

A document provided by a bank for a depositor to fill out, detailing the amount of cash or checks to be added to a particular account.

Cryptocurrency

Digital or virtual currency that uses cryptography for security, operating independently of a central bank.

Cryptography

The practice and study of techniques for secure communication in the presence of third parties by converting information into a code to prevent unauthorized access.