What happens to the stockholders when a corporation files for bankruptcy?a. The stockholders must also file for bankruptcyb. the owners can force the board of directors to pay the debtc. the owners can lose only the money they have investedd. the owners can avoid paying the debt by forming a limited liability corporation

Shareholders have a limited responsibility up to the amount they have invested. Therefore, if a company files for bankruptcy the maximum amount they can lose is the amount they have invested in the company.

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chilljain33 chilljain33 · Answer 2 · 2022-03-23T08:07:35+01:00

Bankruptcy refers to inability of a company to pay its debts and liabilities. When a corporation files for bankruptcy, the owners can lose only the money they have invested.

What happens to the corporation in case of bankruptcy?

A situation of bankruptcy refers to a stage where the corporation in such situation is unable to pay its liabilities and debts due to it in the current period.

In case of a corporation, the members have a limited liability, which means that each member is liable only for the amount of shares invested by him or her in such corporation. They are not liable for over and above the amount invested by them.

Hence, option C; in case of bankruptcy of a corporation, the owners can lose only such money that they have invested in such corporation for the period as such.

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