It is often said that corporations are subject to double taxation. What does this refer to?

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a

Corporations are taxed on the federal level and state level.

b

Both profits and losses are taxed.

c

Taxes must be paid on corporate profits and on dividends distributed to shareholders.

d

Corporations must submit income tax forms twice a year.

To maintain its corporate structure, directors and shareholders must hold meetings at least how often?

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a

Monthly

b

Quarterly

c

Semiannually

d

Annually

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- current answer: A corporation is started when the - blank1 - are filed with the Secretary of State.

A corporation is started when the

blank1 - Word Answer

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are filed with the Secretary of State.

Which of the following is false about corporate financing?

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a

Stocks represent ownership of the business.

b

Bond holders own corporate debt.

c

Stockholders may receive a distribution of corporate profits.

d

Bondholders participate in the management of the business.

Which of the following best describes the relationship between directors, officers, and shareholders?

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a

Directors hire shareholders, who elect officers.

b

Shareholders elect directors, who hire officers.

c

Officers elect shareholders, who hire directors.

d

Shareholders hire officers, who elect directors.

The doctrine of piercing the corporate veil results in which of the following?

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a

Shareholders being held personally liable for a corporate obligation.

b

Judicial dissolution of the corporation.

c

Directors or officers being removed by shareholders for cause.

d

The corporation being held liable for a criminal act.

Which of the following best describes the business judgment rule?

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a

Requires directors and officers to ensure that corporations will not suffer a loss.

b

Provides limited liability for shareholders in a corporation

c

Requires that directors and officers have business expertise before becoming part of a corporation

d

Protects directors and officers when they make honest mistakes in judgment.

Melba owns 200 shares of Central Corp. The shareholders of Central are electing three members to the Board of Directors. Melba wishes to elect Hannibal to the board. What is the maximum number of votes she can give to Hannibal?

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