Why Is It Preferable for Risk Management to Use a Shelf

question 56

Multiple Choice

Why is it preferable for risk management to use a shelf company as the vehicle for taking prompt advantage of a valuable business opportunity?

• A) Outsiders retain liability if the corporation fails to come into existence.
• B) It facilitates direct entrance into contractual obligations by the corporation.
• C) It facilitates the ability of promoters to sign in a personal capacity.
• D) Outsiders are restricted from relying on the apparent authority of agents.

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Definitions:

Profit

The difference between total revenue and total cost.

Rent

Payment made by a tenant to a landlord for the use of a property, room, or apartment for a specified period.

Monopoly Profits

Extraordinary profits earned by a monopoly due to its unique position of having no competition, allowing for higher prices and lower production.

Miracle Drug

A term for a medication that has an unexpectedly profound and beneficial effect on patients.