Georgia Assessments for the Certification of Educators GACE Practice Test

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Georgia GACE Test with comprehensive quizzes featuring flashcards and multiple-choice questions. Get insights, hints, and explanations to ace your exam effortlessly!

Start Multiple Choice Practice Test
Start Flash Cards

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which of the following is true of a corporation?

  1. It is always owned by shareholders

  2. Its board of directors is personally liable if it fails

  3. Its shareholders are personally liable if it fails

  4. It cannot sue another entity or be sued

The correct answer is: It is always owned by shareholders

A corporation is indeed generally owned by shareholders, who invest in the company and hold shares representing their ownership stake. This characteristic is fundamental to the structure of corporations, distinguishing them from sole proprietorships and partnerships where ownership may be individual or shared among partners. The other statements do not accurately describe the nature of a corporation. The board of directors typically is not personally liable for the corporation's failures, as the corporate structure limits personal liability. Similarly, shareholders generally enjoy limited liability, meaning they are not personally responsible for the corporation’s debts beyond their investment in shares. Additionally, corporations have the legal status to sue or be sued, allowing them to engage in legal actions as separate legal entities.

More Questions Like This