Which of the Following Is True for a Corporation's Liability

question 67

Multiple Choice

Which of the following is true for a corporation's liability on the promoters' contracts if the corporation is never formed?

• A) The corporation assumes liability of the promoters' contract automatically upon its creation.
• B) The promoter's liabilities are transferred to the board of directors of the corporation upon its formation.
• C) The promoter, the corporation, and the third-party enter into a novation whereby liability is solely transferred to the corporation.
• D) The promoters have joint personal liability on the contract unless the third party specifically exempts them from such liability.

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Definitions:

Airway Obstruction

A blockage in any part of the airway, which can lead to difficulty breathing and is considered a medical emergency.

Cystic Fibrosis

A genetic disorder that affects the lungs and other organs, characterized by thick, sticky mucus that can clog airways and harbor bacterial infections.

Nourishment

The food or other substances necessary for growth, health, and good condition.