Which of the following is true about shareholders? a If a company is unable to p
ID: 1199698 • Letter: W
Question
Which of the following is true about shareholders?
a
If a company is unable to pay its debts, it seeks protection from creditors in bankruptcy court, in which case shareholders lose the value of their stock.
b
Shareholders’ personal assets, such as their own homes or bank accounts, are liable to creditors.
c
It’s important to note that shareholders do not own any stock in the company, but enjoy legal rights to the company’s assets.
d
Shareholders should be human beings and not corporate entities, such as partnerships or corporations.
e
In a closely held corporation, the body of shareholders tends to be large.
a
If a company is unable to pay its debts, it seeks protection from creditors in bankruptcy court, in which case shareholders lose the value of their stock.
b
Shareholders’ personal assets, such as their own homes or bank accounts, are liable to creditors.
c
It’s important to note that shareholders do not own any stock in the company, but enjoy legal rights to the company’s assets.
d
Shareholders should be human beings and not corporate entities, such as partnerships or corporations.
e
In a closely held corporation, the body of shareholders tends to be large.
Explanation / Answer
First two are correct rest are false
Creditors and share holder both will loose the value of stock once the company is bankrupt. The shareholder stock are go solvent once he declare it to be bankrupt
Second option is correct only in the case of soleproritorship in which person and business are the same. In any other type of business. It will stand false.
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