Unformatted text preview: contract by failing to make the payments. Discuss fully Faraway’s concern. Sample Answer: Although a joint stock company has characteristics of a corporation, it is usually treated as a partnership. Therefore, although the joint stock company issues transferable shares of stock and is managed by directors and officers, the shareholders have personal liability. Unless the shareholders transfer their stock and ownership to a third party, not only are the joint stock company’s assets available for damages caused by a breach, but the individual shareholders’ estates are also subject to such liability. The business trust resembles and is treated like a corporation in many respects. One is the limited liability of the beneficiaries. Unless by state law the beneficiaries are treated as partners, making them liable to business trust creditors, Faraway Corp. can look to only business trust assets in the event of breach....
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- Spring '11
- Business Law, Corporation, Legal entities, Joint stock company, Sample answer, Faraway Corp.