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Corporation Questions.pdf

Corporation Questions.pdf - Corporation Questions Chapter...

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Unformatted text preview: Corporation Questions- Chapter 36 *WILL BE ON FINAL EXAM* 1) What is a corporation? Name 4 different types of corporations and explain each type a corporation is a fictitious legal entity that is created accruing to statuary requirements 4 types: • private corporation: a corporation formed to conduct privately owned business • profit corporation: a corporation created to conduct a business for profit that can distribute profits to share holds in the form of dividends • not-for-profit: a corporation formed to operate charitable institutions, colleges, universities, and other not-for-profit entities These corporations have no shareholders • publicly held corporation: a corporation that has many shareholders and whose securities are often traded on national stock exchange 2) What are the articles of incorporation? Give an example. the basic governing documents of a corporation. It must be drafter and filed with, and approved by, the secretary of state of the state of incorporation Must include • the name of the corporation • the number of shares the corporation is authorized to issue • the address of the corporation s initial registered office and the name of the initial registered • the name and address of each incorporator 3) What are some of the advantages of the corporate form of ownership? - protecting personal assets - raising money - transferring owners - credibility - life 4) What is a Subchapter S Corporation? Allow the shareholders of some corporations to avoid double taxation by electing Subchapter S Corporation status. If a corporation elects to be taxed as an S corporation, it pays no federal income tax at the corporate level. - Corporations that meet the following criteria can elect to be taxed as S corporation: - the corporation must be a domestic corporation - the corporation cannot be a member of an affiliated group of corporations - the corporation can have no more than 100 shareholders - shareholders must be individuals, estates, or certain trusts. Corporation and partnerships cannot be shareholders - shareholders must be citizens or residents of the U.S.. Nonresident aliens cannot be shareholders - the corporation cannot have more than one class of stock. Shareholders do not have to have equal voting rights 5) What is the role of the directors, officers, and the shareholders of a corporation? - board of directors: makes policy decisions concerning the operation of a corporation - corporate officers: to run the corporation s day-to-day - shareholders: owners of a corporation 6) What are the expressed powers of a Corporation? A corporation has the power to purchase, own, lease, sell, mortgage, or otherwise deal in real and personal property; make contracts; lend money; borrow money; incur liabilities; issues notes and bonds and other obligations; invest and reinvest funds; sue and be sued in its corporate name; make donations for the public welfare or for charitable, scientific, or educational purposes; and the like. ...
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