Ammi purchases stock in Vivaldi Corporation. Vivaldi Corporation later encounters legal issues and faces significant legal claims. As a shareholder, Tammi's liability is: a. just like that of partners. b. limited to a maximum of $50,000. c. unlimited. d. limited to her investment in the stock.
Tammi's liability is d. limited to her investment in the stock.
Since Tammi has purchased a stock in a corporation, one of the fundamental property of a corporate is that the stock-holders of the corporation have a limited liability meaning shareholders are only legally responsible for the debts of a company only to the extent of their investment in the company.
So Tammi's liability is limited to her investment in the stock of Vivaldi Corporation.
d. Limited to her investment in stock
The Liability for Tammi here will be limited as per the amount of investment made by tammi in the stock of that corporation.
The real problem of legal issues will be faced by the partners who have unlimited liability towards the corporation.
Hence this justifies my answer that the shareholder is only liable to the amount of money that is invested by him/her in that particular stock.
Hope this clear things up. Thank you and good luck.
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Business, published 27.03.2023
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