Introductory Business Law CLEP Exam 2025 – Your All-in-One Guide to Master the Test!

Question: 1 / 400

What is the ability to sue or be sued?

Judicial power

Capacity

Capacity refers to the legal competency of an individual or entity to be able to bring a lawsuit or be the subject of legal action. Option A, judicial power, may seem like a possible answer at first glance, but it actually refers to the power of the court to adjudicate legal disputes. Option C, regulatory authority, refers to the power of a regulatory agency to make and enforce rules and regulations. Option D, corporate governance, is the system of rules, practices, and processes by which a company is directed and controlled. While corporate governance may have implications for legal action, it is not the same as the ability to sue or be sued. The best answer is B, capacity, as it directly relates to the question.

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Regulatory authority

Corporate governance

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