Shareholders of Corporations and Members of LLCs Are Protected from Tort

question 68

True/False

Shareholders of corporations and members of LLCs are protected from tort liability that exceeds the amount of their investment.

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Definitions:

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders, and is authorized to act as a single entity, legally endowed with rights and responsibilities.

Accounting Profit

The total revenue of a firm minus the explicit costs directly tied to those revenues.

Economic Profit

The difference between total revenues and total costs, including both explicit and implicit costs.

Implicit Costs

Also known as imputed or opportunity costs, they refer to the value of resources used in production that are not directly paid for or accounted for as expenses.