The major rights that accompany ownership of a share of stock include all of the following EXCEPT

The major rights that accompany ownership of a share of stock include all of the following EXCEPT

a. the right to vote in matters concerning the corporation.

b. the right to use the assets of the company.

c. the right to share in the distribution of earnings.

d. the right to share in assets upon liquidation.

The correct answer and explanation is:

The correct answer is b. the right to use the assets of the company.

When an individual purchases a share of stock in a corporation, they are buying a small ownership stake in that company. The rights associated with owning these shares are critical for stockholders to exercise their influence and benefit from the company’s performance. These rights include:

1. The right to vote in matters concerning the corporation (a): Shareholders generally have the right to vote on significant corporate matters, such as electing the board of directors, approving mergers or acquisitions, and other major decisions. This right is fundamental to corporate governance, as it allows shareholders to have a say in how the company is managed.
2. The right to share in the distribution of earnings (c): Shareholders are entitled to receive a portion of the company’s profits, usually in the form of dividends. The board of directors determines whether and how much of the profit is distributed to shareholders. The right to share in earnings is one of the key motivations for purchasing stock.
3. The right to share in assets upon liquidation (d): In the event of the company being liquidated (i.e., going out of business), shareholders have the right to a share of the company’s remaining assets. However, this right is subordinate to creditors, meaning shareholders are only entitled to remaining assets once debts have been settled.

However, the right to use the assets of the company (b) is not one of the rights granted to shareholders. While shareholders own a portion of the company, this ownership does not entitle them to use its assets for personal purposes. The company’s assets are meant to support its operations, and control over their use rests with management. Shareholders cannot directly access or utilize company assets outside of their investment returns (such as dividends or capital gains).

In summary, while shareholders enjoy important rights to influence the corporation and share in its profits and liquidation assets, they do not have the right to personally use the company’s assets.