Unit 6 Review Part 2 Question Preview (ID: 22865)

Q 11-25.

Corporations established for a governmental purpose are called
a) public corporations
b) private corporations
c) public service corporations
d) profit-making corporations

Electric, gas, and water companies are examples of
a) public service corporations
b) private corporations
c) public corporations
d) profit-making corporations

An applications for incorporation must be accompanied by or contain the basic plan of operation called the
a) articles of incorporation
b) business judgement rule
c) bylaws
d) shares of stock

The basic type of stock carrying the right to one vote per share owned is
a) common stock
b) preferred stock
c) stock dividend
d) none of these

The directors of a corporation
a) all of these
b) act together to make contracts for the corporation
c) appoint and set the salaries of the top officers of the company
d) set major goals and determine basic policies

A corporation as the power
a) all of these
b) of perpetual succession
c) to make its own bylaws
d) to use any legal means to conduct authorized business

Shareholders do not have the right to
a) possess any public property
b) inspect corporate books of account
c) transfer shares
d) all of these

Henry and Madelyn own a small business and have often considered incorporating their business. Which of the following is not an advantage of incorporation?
a) a corporation is taxed several times
b) the corporation, not individual stock holders, are liable for the corporation's debt
c) ownership interest are easily transferred
d) it can continue to function after their deaths

Dexter and Desiree would like to organize a ballet company. If their revenues from this corporation exceed its expenses, these revenues will not be distributed to the corporate owners. What type of corporation have they organized?
a) non profit organization
b) charitable corporation
c) public corporation
d) public service corporation

Double taxation means that
a) the corporation is taxed on corporate income and shareholders are taxed on dividends
b) the corporation's tax rate is doubled
c) the shareholder's tax rate is doubled
d) both shareholder's and corporation's tax rates are doubles

S corporation earnings are
a) only taxed at the individual owner's level
b) taxed both as corporate income and individual owner's income
c) only taxed as corporate income
d) none of these

The number of shareholders in an S-corporation must be
a) 75 or less
b) 60 or less
c) 30 or less
d) unlimited

Why was the LLC form of business organization created in the United States?
a) to eliminate some of the inherent flaws both in the limited partnership and Subchapter S corporation
b) none of these
c) to give larger corporations another option
d) to give small businesses the tax advantages of the Subchapter C organization

In order to form a limited liability corporation in her state, what must Tina do?
a) submit articles of organization with her state
b) submit articles of incorporation in her state
c) pay incorporation taxes
d) both submit articles of incorporation and pay incorporation taxes

Which type of business organization is subject to double taxation?
a) subchapter S corporation
b) subchapter C corporation
c) partnership
d) none of these

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