Which of the Following Is NOT True of Shareholder Liability

question 40

Multiple Choice

Which of the following is NOT true of shareholder liability?

• A) Shareholders are liable for the debts of a corporation to the extent of their investment
• B) Shareholders are liable for a breach of contract if a stock subscription agreement was signed and no stock was purchased
• C) Shareholders are liable for watered stock
• D) Shareholders are liable for violations of the business judgment rule
• E) Shareholders are personally liable for receiving illegal dividends.

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Definitions:

Thermal Energy

The internal energy present in a system due to the motion of its atoms or molecules, often perceived as heat.

Felsic Magma

Magma that is high in silica and light in color, typically associated with explosive volcanic eruptions.

Intermediate-Composition

Refers to igneous rocks with a silica content between mafic and felsic rocks, often associated with volcanic activity.

Silicate Chains

Structures formed by linking silicon and oxygen atoms in a chain, foundational to many silicate minerals.