Which of the following statements is CORRECT?
以下哪项陈述是正确的？

Question

BlackTom AI · Accepted Answer

First, restating the question and the options helps set the stage for evaluation.
Question: Which of the following statements is CORRECT?
Options:
1) A hostile takeover is the main method of transferring ownership interest in a corporation.
2) A corporation is a legal entity created by a state, and it has a life and existence that is separate from the lives and existence of its owners and managers.
3) Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organization.
4) Limited liability is an advantage of the corporate form of organization to its owners (stockholders), but corporations have more trouble raising money in financial markets because of the complexity of this form of organization.
5) Although the stockholders of the corporation are insulated by limited legal liability, the legal status of the corporation does not protect the firm's managers in the same way, i.e., bondholders can sue the firm’s managers if the firm defaults on its debt.

Option 1 analysis:
- The claim that a hostile takeover is the main method of transferring ownership interest in a corporation is not accurate. Hostile takeovers can occur, but they are not categorized as the main method of transferring ownership; there are many other mechanisms (e.g., voluntary sales, mergers, equity issuances) that transfer ownership. This statement overstates the role of hostile takeovers and is therefore incorrect.

Option 2 analysis:
- This statement captures a foundational property of the corporate form: a corporation is a separate legal entity created by the state, with a life and existence distinct from its owners (shareholders) and managers. This separateness underpins limited liability and the corporation’s ability to own property, enter contracts, sue and be sued in its own name. This is the standard, correct description of a corporation’s legal status.

Option 3 analysis:
- The phrase asserts that unlimited liability and limited life are advantages of the corporate form. In reality, corporations offer limited liability (a protection for owners) and unlimited life (the entity continues regardless of ownership changes). Therefore, this option is factually incorrect on both counts and presents a misleading contrast.

Option 4 analysis:
- While it is true that individuals typically enjoy limited liability as stockholders, the statement that corporations have more trouble raising money due to the form’s complexity is misleading. Corporations generally have enhanced access to capital markets (e.g., stock and bond offerings) precisely because of their structure and the ability to issue securities. This option misstates the implications for financing and is incorrect.

Option 5 analysis:
- Although stockholders enjoy limited liability, it is not accurate to say bondholders can automatically sue managers simply because the firm defaults. In many jurisdictions, managers can be held liable for breaches of fiduciary duty or negligence, but bondholders suing managers as a default remedy is not the standard or guaranteed outcome; debt holders typically have contractual remedies and may sue the company or directors under specific circumstances, but this statement overgeneralizes and is thus misleading.

In summary, evaluating each statement shows that only Option 2 accurately describes a fundamental characteristic of corporations, while the other statements contain factual or conceptual inaccuracies that misrepresent corporate structure or finance mechanisms.

Which of the following statements is CORRECT? 以下哪项陈述是正确的？

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