What is the maximum number of shareholders permitted within a "C" corporation?

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Prepare for the Tennessee Business and Law Exam. Study using flashcards and multiple-choice questions with explanations and hints. Ace your exam!

In a "C" corporation, there is no limit to the number of shareholders it can have. This characteristic allows "C" corporations to raise capital by having an unlimited number of investors, making it a popular choice for businesses looking to expand or seek investments.

This structure is particularly advantageous as it facilitates the sale and transfer of shares, which can attract a broader base of potential shareholders without the constraints faced by other business entities, such as S corporations that are limited to 100 shareholders and have additional restrictions on shareholder eligibility. Thus, the choice of unlimited shareholders aligns with the growth and investment strategies that "C" corporations often pursue.

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