Jan, Marsha and Cindy incorporated and obtained a $500,000 loan in their corporate name, JMC Incorporated. The loan must be paid back at a rate of eight percent interest over eight years. After paying on the loan regularly for six years, JMC stopped making payments and Jan, Marsha and Cindy defaulted on the loan while still owing $200,000. JMC had no assets at the time of the default. What is the liability of Jan, Marsha and Cindy in this case?

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In most cases when a corporation defaults on a loan the shareholders liability is limited to the amo... View the full answer