What is one of the characteristics of a corporation?

• A. Ease of transfer of ownership
• B. Unlimited personal liability of owners
• C. Direct control by a single owner only
• D. No ability to raise capital

Answer: (A)

Ownership can be transferred easily in a corporation because it is a separate legal entity whose ownership is represented by shares that can be bought and sold without affecting the company’s existence. This liquidity in ownership helps investors enter and exit smoothly, which is a defining feature of corporations. In contrast, unlimited personal liability is not a characteristic of a corporation—shareholders’ liability is limited to their investment. A corporation also isn’t controlled by a single owner; governance is through a board of directors and officers, even if one person owns most or all shares. And the ability to raise capital is a strength, not a weakness, since corporations can issue stock or bonds to fund operations. So the easy transfer of ownership best matches how corporations operate.