Which of the Following Is True for a Corporation's Liability

question 46

Multiple Choice

Which of the following is true for a corporation's liability on the promoters' contracts if the corporation is never formed?

• A)The corporation assumes liability of the promoters' contract automatically upon its creation.
• B)The promoter's liabilities are transferred to the board of directors of the corporation upon its formation.
• C)The promoter, corporation, and the third-party enter into a novation whereby liability is solely transferred to the corporation.
• D)The promoters have joint personal liability on the contract unless the third party specifically exempts them from such liability.

---

Definitions:

Aqueous Salt Solutions

Solutions made by dissolving salt in water, where the water is the solvent and salt is the solute.

Reaction Rate

The reaction rate refers to the speed at which reactants are converted into products in a chemical reaction, influenced by factors such as concentration, temperature, and catalysts.

Concentration Effect

The influence on the rate of a chemical reaction of the concentration of reactants; generally, an increase in concentration leads to an increase in reaction rate.

Collision Theory

A theory that proposes chemical reactions occur when reactant molecules collide with sufficient energy and an appropriate orientation.