Which of the Following Is a Primary Legal Characteristic of the Corporate

question 49

Multiple Choice

Which of the following is a primary legal characteristic of the corporate form of business?

• A)The management of the business is centered in a Board of Directors elected by the shareholders.
• B)A shareholder must seek permission to sell his stock.
• C)The life of the corporation will terminate when a majority of the shareholders die or cease to exist.
• D)A shareholder is personally liable for the debts of the corporation.

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Definitions:

Common Stock Dividend

A portion of a company's earnings distributed to common shareholders, typically in the form of cash or additional shares.

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, reinvestment in the business, or to pay debt, rather than being paid out as dividends.

Additional Paid-In Capital

The excess amount paid by investors over the par value of shares, reflecting the additional capital contributed to a corporation.

Accumulated Comprehensive Income

The total of all net income and other comprehensive income items that have been accumulated over the life of a company.