The Corporation (law)

Which of the following is NOT a benefit of perpetual life?

• It has the ability to expose personal assets

• It allows the corporation to continue even if shareholders do not

• It allows corporations to be a safer and more stable place to invest money

• It raises the chances an investor has of seeing a return on their money

In a limited liability an individuals liability is limited to which of the following?

• All personal assets

• The amount determined in a contract

• The value of the investment in the company

• The value of the entire company

Which of the following explains the capacity to contract?

• Legal actions are a responsibility of investors

• Legal actions are a responsibility of management

• Legal actions are a responsibility of employees

• Legal actions are a responsibility of the corporation

Which of the following describes a possible form of dissolution of a corporation?

• The corporation is bought out

• The organizers give the corporation an end date so when the mission is completed it comes to an end

• The corporation officers decide to rename the organization

• The organization’s managers decide to sell the corporation

Which of the following represents a legal title of ownership?

• Dissolution papers

• Share certificate

• Hierarchical forms

• Perpetual license

S corporations are most appropriate for entrepreneurs who prefer which of the following? A.

• To have international shareholders

• To choose whether or not to use the double taxation method

• To sell unlimited stock to raise money for the business

• To be taxed as if they were sole proprietors or partners

Limited liability corporations can NOT do which of the following?

• Choose whether or not to use the double taxation method

• Utilize the benefits of stock ownership and sales

• Determine if the members want to manage themselves or have a manager with authority over them

• . Have foreign investors

Which of the following accurately describes double taxation?

• Corporate income taxes are paid on profits and on stockholders’ personal income on dividends

• Corporate income taxes are paid at the federal and state levels

• Corporate income taxes are paid twice each year

• Corporate income taxes are paid for an amount which is double the company’s profits

After a C corporation is formed, what must happen for it to become an S corporation?

• The company must reach a specific earnings level

• The company must choose a board of directors and give all decisionmaking powers to a president

• The company must elect a special tax status with the IRS

• The company must be certified as a financial institution

Which of the following is an S corporation permitted to do?

• Own subsidiaries

• Pay FICA taxes on salaries only

• Issue multiple forms of stock

• Have an unlimited number of shareholders