Revised Corporation Code Practice Test 2026 - Free Corporation Code Practice Questions and Study Guide

A key feature of a corporation established under the Revised Corporation Code is the ability to issue shares of stock. This characteristic allows corporations to raise capital from investors by selling ownership in the form of shares. When a corporation issues shares, it can attract various investors who can buy and trade those shares, providing the company with necessary funding for its operations, growth, and expansion.

Issuing shares of stock also allows for limited liability for the shareholders, meaning they are only responsible for the corporation's debts up to the amount they invested. This foundational concept fosters a business environment conducive to investment and entrepreneurship, as it encourages individuals to invest without exposing their personal assets to business liabilities.

In contrast, the other options present structures or features not applicable to corporations governed by the Revised Corporation Code. For instance, unlimited liability for shareholders would contradict the fundamental benefits of incorporating, and a partnership structure with equal profit sharing does not align with the corporate structure that typically involves distinct ownership and profit distribution based on share ownership. Dependency on government funding suggests a lack of financial autonomy, which is not inherent to the corporate model. Therefore, the ability to issue shares stands out as a defining characteristic of a corporation under the Revised Corporation Code.