Question

Which of the following is true?

	a.	the limited liability of stockholders under the corporate business structure makes it easier to raise equity capital.
	b.	when employees also own a business, their incentive to shirk is removed.
	c.	under the corporate form of business organization, the owners of the firm are personally liable for its debts.
	d.	under the partnership form of business organization, the owners are not personally liable for the debts of the business.

Answer 1

The correct statement is (a), i.e., the limited liability of stockholders under the corporate business structure makes it easier to raise equity capital.

And rest of the statements are false. Owners of the corporate form of business organization are not personally liable for it's debts. Owner of the partnership form of organization are personally liable for the debts of the business. When employees also own a business, their incentive to shirk is not removed