Which of the Following Statements About the Organization of Firms

question 63

Multiple Choice

Which of the following statements about the organization of firms is true?

• A)Owners of a corporation have unlimited liability.
• B)Corporations have limited access to money markets.
• C)Crown corporations are never interested in increasing profits because they have other goals.
• D)Partnerships are the most common form of business organization in Canada.
• E)Owners of a corporation are not personally liable for the firm's actions,though its directors may be.

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Definitions:

Limited Partners

Part-owners of a partnership who have limited liability to the debts of the partnership and do not participate in day-to-day management.

Personal Liability

The legal responsibility of an individual to satisfy debts or obligations from their own assets.

Debts

Money owed by one party, the debtor, to another, the creditor; an obligation to pay or render something of value.

Partnership

A business arrangement in which two or more individuals share ownership and the operational responsibilities of the business.