QUESTION

Can a corporation that is incorporated in one state do business in other states?

a) No, a corporation can only do business in the state where it is incorporated.

b) Yes, a corporation can do business in states where it is not incorporated by obtaining a certificate of authority in states where it is not incorporated.

c) Yes, a corporation can do business in a state where it is not incorporated, but it must re-incorporate in states where it was not originally incorporated.

d) Yes, a corporation can do business in a state where it is not incorporated, but it must use another name in a state where it is not incorporated.

QUESTION

What does it mean that a corporation is a separate legal entity?

a) The corporation is owned by people who are known as shareholders.

b) The corporation has to have an address for the business it operates that is different than the addresses of the people who own the corporation.

c) The corporation has to be managed by people who are not shareholders in the corporation.

d) The corporation is considered to be a legal person with certain rights that exists independently of the people who own stock in the corporation.

QUESTION

A corporation that meets specific conditions and that is taxed like a partnership is a(n):

a) nonprofit corporation.

b) closely held corporation.

c) subchapter S corporation.

d) professional corporation.

QUESTION

Dividends paid to shareholders by corporations are paid from profits of the corporation after the corporation has paid income taxes on those profits. When a shareholder receives a dividend, that dividend is taxable income to that shareholder. These income tax consequences are known as:

a) dividend taxation.

b) corporate taxation.

c) double taxation.

d) retained earnings taxation.