Question

The distinguishing feature of a corporation is that: A. there is no legal difference between the...

The distinguishing feature of a corporation is that:

A. there is no legal difference between the corporation and its owners.

B. it is a legally defined, artificial being, separate from its owners.

C. it spreads liability for its corporate obligations to all shareholders.

D. it provides limited liability only to small shareholders.

E. none of the above.

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Answer #1

Answer to the Question is Option "B" i.e "it is a legally defined, artificial being, separate from its owners."

A corporation is a separate legal entity, it is an artificial person and it will continue to be there whether the owners come and go, it can enter into agreements, can be sued or can sue, hire its workforce, can lend money to stakeholders and can borrow money on its name, it can buy asset on its name. The Taxes are also paid to the government in the name of corporation.

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