What obligation do shareholders have in relation to corporate debts?

Shareholders have no liability for corporate debts beyond their investment, which means they can only lose the money they have invested in the company and are not personally responsible for any of the firm's debts. This principle is a fundamental characteristic of limited liability corporations, such as C corporations and S corporations, where the corporate structure legally separates the individual's assets from the corporate entity.

This structure protects shareholders from creditors of the corporation; if the company fails or is unable to pay its debts, shareholders cannot be pursued for additional funds beyond their initial investment. This encourages investment by reducing personal financial risk, as shareholders are only at risk for what they have invested in shares of stock.

The other options do not align with this principle. For instance, the concept of personal liability for all corporate debts is inconsistent with the limited liability structure of corporations. Shareholders are also not responsible for paying corporate debts directly, nor is their responsibility tied to their management roles. Thus, the correct understanding of corporate debt liability focuses on the protection and limitation afforded to shareholders.