A corporation is a legal entity that is separate and distinct from its owners. 1 Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes. Some refer to it as a “legal person.”
Which of the following is not a characteristic of a corporation?
Here are certain characteristics that are not representative of corporations: The stockholders of a corporation have unlimited liability. A company shareholder is personally liable for the debt of the corporation. The corporation’s resources are limited to what the stockholders can contribute.
Which statement is true about a sole proprietorship?
Option B: Correct, as a sole proprietor is solely liable for all liabilities of business.
Which of the following represents the maximum number of shares a corporation can issue?
authorized shares
The authorized shares are the maximum number of shares that a company can issue at any given point in time. The issued shares are always less than or equal to the authorized shares. The outstanding shares represent the difference between the shares issued and the shares repurchased.
Which is true of publicly held business organizations?
Which of the following statements is true of publicly held business organizations? A. Publicly held organizations are owned only by a few persons. B. Publicly held organizations are only owned by the government. C. Shareholders of publicly held organizations can transfer their ownership without interfering with the organization’s management.
Which is true of the partnership form of business?
An s corporation pays double tax on its income. Which of the following is true of the partnership form of business? A. The vast majority of partnership agreements are written. B. An assignee of a partnership interest has the right to participate in control and enjoys the status of partner. C.
Which is true of limited liability companies Chapter 9?
To bring a limited liability partnership into existence, the owners file articles of organization with the state. D. It is more like a limited liability company than a general partnership. Which of the following is true of limited liability companies?
When do corporations not need to establish books of accounts?
A corporation need not establish books of accounts. D. When an employee or director commits a tort or crime while conducting corporate business, the corporation is not liable for the consequences.
