Question

Which of the following is not true of a corporation?
A) It may sue and be sued B) It may buy, own, and sell property C) It may enter into binding legal contracts in its own name D) The acts of its owners bind the corporation

Answer 1

Explanation:

The correct answer is option (a)

Answer 2

The statement that the acts of its owners bind the corporation is false.

• The corporation is a legal entity that is separate and distinct from its owners. A corporation is not run by a single person or a private group of few persons.
• The corporation is owned by the stockholders and managed by some people from stockholders. But the shareholders are never the owners of the corporation's assets.
• A corporation may sue and be sued and can buy, sell and own properties.
• The corporation can enter into legal contracts.
• Hence, the correct answer is option D).