Future Business Leaders of America (FBLA) Agribusiness Practice Test

What is one characteristic of shareholders in a corporation?

1. They are personally liable for corporate debts

2. They own interests in the corporation indicated by stock certificates

3. They manage day-to-day operations

4. They cannot sue the corporation

The correct answer is: They own interests in the corporation indicated by stock certificates

Shareholders are individuals or entities that own shares in a corporation, and their ownership is represented by stock certificates. This characteristic is fundamental because owning stock typically confers certain rights, such as voting rights in corporate matters and the potential for dividends. As shareholders, they hold an equity interest in the corporation, which means they benefit from the corporation's successes and bear some risk if the corporation does poorly. This ownership structure is a key factor in the way corporations operate, as it allows for a separation between ownership and management. While shareholders do not generally manage day-to-day operations—that is the role of the corporation's management—they do have a say in significant corporate decisions through their voting rights. This ownership structure provides a level of protection for shareholders, as they are not personally liable for corporate debts, distinguishing their financial risk from that of the corporation itself.