Understanding the Different Types of Corporations

The video tutorial provides an overview of corporations, explaining their characteristics and structures. It differentiates between C and S corporations, focusing on taxation and ownership. The tutorial also covers close corporations, highlighting their management and ownership differences compared to public corporations. Lastly, it discusses professional corporations, emphasizing their unique tax status and management structure.

What is a key characteristic of a corporation that distinguishes it from its owners?

• It is subject to double taxation.

• It is a state-recognized entity.

• It has a specific management structure.

• It is completely separate from its owners.

How does an S corporation differ from a C corporation in terms of taxation?

• S corporations are taxed at a higher rate.

• S corporations have more complex management structures.

• S corporations are subject to double taxation.

• S corporations allow profits to pass through to shareholders without corporate tax.

What is a defining feature of a close corporation?

• It is publicly traded.

• It is only available to professional practitioners.

• It has relaxed management standards.

• It is subject to double taxation.

Which type of corporation is typically held by a small group of related individuals?

• Close corporation

• Professional corporation

• Public corporation

• C corporation

Who can typically form a professional corporation?

• Any business owner

• Owners of a close corporation

• Only professional practitioners like doctors and lawyers

• Shareholders of a public corporation