Smith's Shoes Is a Failed Business Enterprise, with Debts of $10

question 175

Multiple Choice

Smith's Shoes is a failed business enterprise, with debts of $10 million. Steve Smith has an ownership stake in Smith's shoes. Which of the following statements INCORRECTLY characterizes Steve Smith's legal liability for the debts of Smith's Shoes, depending on the firm's type of business organization?

• A) If Smith's Shoes is a proprietorship, then Steve Smith is fully liable for the entire $10 million in debt of the failed shoe store.
• B) If Steve Smith is a partner in Smith's Shoes, then his legal liability for the debts of Smith Shoes is $10 million divided by the number of partners.
• C) If Smith's Shoes is a corporation in which Steve Smith is a stockholder, then Steve Smith does not need to use any of his wealth to pay the debt because the company has limited liability.
• D) None of the above statements is incorrect.

---

Definitions:

Military Families

Families where one or more members serve in the armed forces, often facing unique challenges such as frequent relocations and deployment-related separations.

Abuse or Neglect

Involves the mistreatment of individuals, typically vulnerable ones like children or the elderly, through harmful actions or the failure to provide necessary care.

Deployed

Refers to the movement of military personnel to specific areas for service or duty.

Non-normative Transitions

Life events that occur unexpectedly or unconventionally, challenging standard developmental paths.