Regarding Corporations, Which Statement Follows the Principle of Limited Liability

question 48

Multiple Choice

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

• A) A corporation is liable for its own debts.
• B) A director who drives dangerously and causes an accident while on company business.
• C) 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.
• D) The trustee in bankruptcy requires shareholders to repay corporate property received prior to bankruptcy.
• E) Shareholders of a small, private company provide security or personal guarantees on loans made to their company.

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