Question

Which of the following is NOT true about a shareholder in a corporation?

Question 7 options:

A)
a shareholder helps elect a board of directors


B)
a shareholder earns profits known as dividends


C)
a shareholder is responsible for a corporations debts


D)
a shareholder may sell his or her stock

Save

Answer 1

The correct answer is C) a shareholder is responsible for a corporations debts.

Step-by-step explanation:

If the company fails, its shareholders aren't held personally responsible for the failure, nor will they have to pay off the debt from their own assets. The debts will be paid from the company's assets. The only instance when a shareholder is held responsible is if he or she signed a personal guarantee for a loan of some kind. But that's the only exception to the rule.