Acme Corporation is chartered in Delaware, but its primary area of operation is in South Carolina. In South Carolina, Acme would be considered a(n) ________ corporation. - correct answer foreign
T/F State law requires that individuals creating a partnership f...
Acme Corporation is chartered in Delaware, but its primary area of operation is in South Carolina. In
South Carolina, Acme would be considered a(n) ________ corporation. - correct answer
foreign
T/F State law requires that individuals creating a partnership file the Articles of Partnership with the
secretary of state. - correct answer False
T/F "Double taxation" refers to the fact that corporations are required to pay both federal and state
income taxes. - correct answer False
T/F The corporation has the advantage of transferable ownership, which easily enables the corporation
to sell shares to others or to transfer stock through inheritance. - correct answer
True
Which form of ownership generally has the least ability to accumulate capital? - correct answer
Sole proprietorship
T/F Liquidating an S corporation involves several steps, including paying all taxes and debts, obtaining
the written approval of shareholders to dissolve the company, filing a statement of intent to dissolve
with the secretary of state's office and, finally, distributing all remaining assets of the corporation to
shareholders. - correct answer True
T/F One disadvantage of an S corporation is that the cost of many benefits-insurance, meals, lodging,
and others-that are paid to shareholders with 2 percent or more of stock-cannot be deducted as
business expenses for tax purposes and are considered taxable income. - correct answer
True
T/F In a professional corporation, all shares of stock must be owned and held by individuals licensed in
the profession of the corporation. - correct answer True
, T/F If a partnership agreement does not exist, the partnership will be governed by the Uniform
Partnership Act. - correct answer True
T/F An S corporation can issue both voting and nonvoting common stock to its shareholders. - correct
answer True
T/F Changing from one form of ownership to another once a business is up and running can be difficult,
expensive, and complicated. - correct answer True
T/F There is no limit to the number of general partners a partnership may have, but it must have at least
one general partner. - correct answer True
Which of the following statement(s) is/are true? - correct answer All of these
T/F Stockholders in the corporation have the same kind of liability as do general partners in a
partnership. - correct answer False
T/F The limited liability company, like an S corporation, is a form of ownership that is a cross between a
partnership and a corporation. - correct answer True
T/F Choosing S corporation status is usually beneficial to startup companies anticipating net losses and
to highly profitable firms with substantial dividends to pay out to shareholders. - correct answer
True
T/F A corporation formed and chartered in Kansas is considered a domestic corporation when doing
business in Kansas, and a foreign corporation when doing business in Missouri. - correct answer
True
T/F The partnership, like the proprietorship, avoids the disadvantage of double taxation. - correct
answer True
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