Which statement about ownership in a corporation is true?

• A. It is widely illiquid
• B. It cannot be transferred
• C. Transfer requires complex legal procedures
• D. It is more easily transferable than ownership in other forms of organization

Answer: (D)

Ownership in a corporation is represented by shares of stock, which are designed to be easily traded. This makes transferring ownership much simpler than in many other business forms. In public companies, shares are bought and sold on stock exchanges, providing liquidity and a transparent price. Even for private corporations, transfers are typically accomplished through a formal stock transfer and require appropriate approvals, but the underlying mechanism is still the sale of stock rather than rearranging the entire business.

This stands in contrast to a sole proprietorship, where transferring ownership means selling the business itself and its assets, liabilities, and operations. In a partnership, transfers usually require the consent of the other partners and may trigger a reorganization of the business. Because stock can be transferred with relatively straightforward documentation and market mechanisms, corporate ownership is more easily transferable than ownership in other forms.