Asked by Arianna Mendez on May 08, 2024
Verified
Characteristics of a corporation include:
A) stockholders having limited liability.
B) direct management by the stockholders.
C) mutual agency.
D) Both A and C are correct.
Limited Liability
A legal structure for a business where the owners' personal assets are protected from the company's debts and liabilities, limiting their risk to the amounts they have invested in the company.
Mutual Agency
A legal principle in partnership businesses where each partner is authorized to act on behalf of the partnership and bind it in contracts.
- Comprehend the architecture and traits of corporations.
- Highlight the contrasts between common and preferred stock, specifying their entitlements and various types.
Verified Answer
CC
Casey Cody-Jackson
May 11, 2024
Final Answer :
A
Explanation :
Stockholders of a corporation have limited liability, meaning they are not personally responsible for the business debts and liabilities of the corporation beyond their investment in the company's stock. Direct management by stockholders and mutual agency are not characteristics of a corporation; instead, corporations are managed by a board of directors elected by the stockholders.
Learning Objectives
- Comprehend the architecture and traits of corporations.
- Highlight the contrasts between common and preferred stock, specifying their entitlements and various types.