Ron owns five percent of a corporation's common stock. The concept of limited liability would imply that Ron is personally responsible for only five percent of the financial obligations of the corporation.

A. TrueB. False

Question

Trenton

Business

16 February, 00:45

Ron owns five percent of a corporation's common stock. The concept of limited liability would imply that Ron is personally responsible for only five percent of the financial obligations of the corporation.

A. TrueB. False

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Answers (1)

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Lexie Stanton · Answer 1

B. False

Explanation:

The concept of limited liability means that an investor's liability for the debt of the company in time of liquidation is limited to the amount paid for the shares he subscribed for in the corporation or where they are not fully paid, to the unpaid portion of his shareholdings, This means the highest a shareholder can lose in a limited liability corporation in time of liquidation is the monetary value of the share he has in the firm.

In line with the above, it means that Ron is not personally liable to five percent of the financial obligations of the corporation but only the monetary value of the share he has bought and if they are not fully paid yet, he will only the unpaid portion.

Ron owns five percent of a corporation's common stock. The concept of limited liability would imply that Ron is personally responsible for only five percent of the financial obligations of the corporation.A. TrueB. False

Ron owns five percent of a corporation's common stock. The concept of limited liability would imply that Ron is personally responsible for only five percent of the financial obligations of the corporation.

A. TrueB. False