Questions: Question 10 of 19 What is a major regulatory requirement for public corporations? Select an answer from the options below. A Unlimited liability for all shareholders B No board of directors C Limited ability to raise capital D Public reporting of financial information

Question 10 of 19 What is a major regulatory requirement for public corporations? Select an answer from the options below. A Unlimited liability for all shareholders B No board of directors C Limited ability to raise capital D Public reporting of financial information
Transcript text: Question 10 of 19 What is a major regulatory requirement for public corporations? Select an answer from the options below. A Unlimited liability for all shareholders B No board of directors C Limited ability to raise capital D Public reporting of financial information
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Solution

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The answer is D: Public reporting of financial information.

Explanation for each option:

A. Unlimited liability for all shareholders - This is incorrect. In public corporations, shareholders have limited liability, meaning they are only liable for the amount they have invested in the company. They are not personally responsible for the company's debts and liabilities.

B. No board of directors - This is incorrect. Public corporations are required to have a board of directors. The board is responsible for overseeing the management of the corporation and making key decisions on behalf of the shareholders.

C. Limited ability to raise capital - This is incorrect. Public corporations generally have a greater ability to raise capital compared to private companies. They can issue shares to the public and attract a large number of investors.

D. Public reporting of financial information - This is correct. One of the major regulatory requirements for public corporations is the obligation to publicly report their financial information. This includes regular filings with regulatory bodies such as the Securities and Exchange Commission (SEC) in the United States. These reports provide transparency and allow investors to make informed decisions.

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