Question

A corporation's shareholders can have their personal assets used to fulfill corporate debt if: all of...

A corporation's shareholders can have their personal assets used to fulfill corporate debt if:

all of the answers are correct.

the shareholders and directors operate separately.

the corporation is not operating as a separate entity from the shareholders.

the corporation's annual profits fall below a specified amount.

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Answer #1

Option C (the corporation is not operating as a separate entity from the shareholders), when the corporation and shareholders are working as a single entity then the share holders are obliged to corporation if corporation incurs a debt which it cannot pay. But the liable amount of the shareholder is the total amount of value of shares. This amount is the maximum amount a shareholder can be charged for or is obligated to pay.

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