Asked by Layella Phillips on Feb 18, 2024
Verified
What characteristic of a C corporation will make it possible to pass the corporation on to new owners after the original owners pass away?
A) vesting
B) the laws of inheritance
C) transferable ownership
D) stockholder rights
A) vesting
B) the laws of inheritance
C) transferable ownership
D) stockholder rights
Vesting
The concept of imposing equity forfeitures on cofounders over a certain period of time on a piecemeal basis should they not stay with the company.
- Understanding the concept of C corporations and their ownership structure.
- Recognizing the importance of passing on a corporation to new owners after the original owners' demise.
- Identifying the characteristic of transferable ownership as a key factor in enabling the transfer of a C corporation to new owners.
Verified Answer
AM
Allyssa Malony
Feb 18, 2024
Final Answer :
C
Explanation :
Transferable ownership in a C corporation allows for the easy transfer of ownership to new owners, such as through the buying and selling of stocks. This makes it possible for the corporation to be passed on after the original owners pass away. Vesting and stockholder rights do not necessarily guarantee the ability to transfer ownership, and the laws of inheritance may not always apply depending on the specific circumstances.
Learning Objectives
- Understanding the concept of C corporations and their ownership structure.
- Recognizing the importance of passing on a corporation to new owners after the original owners' demise.
- Identifying the characteristic of transferable ownership as a key factor in enabling the transfer of a C corporation to new owners.