Why Is It Possible for a Corporation to Enter into Contracts,acquire

question 42

Multiple Choice

Why is it possible for a corporation to enter into contracts,acquire assets,incur obligations,and enjoy protection against the seizure of its property?

• A)The number of owners,and hence the spread of risk among these owners,is not limited.
• B)Its owners are liable for any obligations it enters into.
• C)The state in which the corporation is incorporated provides safeguards against any wrongdoing by the corporation.
• D)It is a legally defined,artificial entity that is separate from its owners.

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Definitions:

Confusion

The act of mingling or blending goods or property in such a way that they can no longer be distinguished; in legal terms, it can affect rights of ownership.

Negotiable Document of Title

A document guaranteeing the possession and control of goods, which can be transferred to another party to facilitate commerce.

Legal Title

The formal right of ownership of property, which may or may not include the right to use or occupy the property.

Friendly Fire

Incidents in which persons are inadvertently harmed or killed by forces from their own side during an armed conflict or military operation.