Asked by Tyteana Ratliff on Jun 25, 2024
Verified
Which of the following is not true of a corporation?
A) It may buy, own, and sell property.
B) It may sue and be sued.
C) The acts of its shareholders bind the corporation.
D) It may enter into binding legal contracts in its own name.
Corporation
A legal entity that is separate and distinct from its owners, who are shareholders; it has its rights, privileges, and liabilities distinct from those of its members.
Legal Contracts
Binding agreements between two or more parties that are enforceable by law.
- Recognize the features and entitlements linked to owning a corporation, covering aspects of liability, transferability, and the consequences of trading shares.
Verified Answer
BK
bhuda kannadiJun 26, 2024
Final Answer :
C
Explanation :
Corporations act through their authorized agents and officers, not directly through the acts of their shareholders. The shareholders' personal actions do not bind the corporation unless they are acting in an official capacity or have been given specific authority to act on behalf of the corporation.
Learning Objectives
- Recognize the features and entitlements linked to owning a corporation, covering aspects of liability, transferability, and the consequences of trading shares.