Which of the following is NOT a right of stockholders Unlimited liability Vote a

Question

Which of the following is NOT a right of stockholders Unlimited liability Vote at Stockholders meetings Buy or sell stock Receive dividends Pamela and Penelope have a partnership agreement with the following conditions: Pamela receives $75,000 and Penelope receives $90,000 as annual salaries. Each partner is allowed an annual interest allowance of 10% of the beginning of year capital balance. Any remaining balance of income or loss is allocated equity. Beginning capital balances equal $800,000 for Pamela and $700,000 Net Income for 2005 is $400,000. The distribution of net income to the two partners is:

Explanation / Answer

A shareholder has right to :

Vote at stockholder’s meeting, Buy or sell stock and Receive dividends.

But the liability of shareholders is limited, it cannot be unlimited.

Hence the answer shall be :

A. Unlimited liability

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