Advantages and Disadvantages of Corporations
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Questions and Answers

What is one of the advantages for a corporation in selling shares?

  • Becoming tax-exempt
  • Increasing time and cost of formation
  • Avoiding government regulations
  • Strengthening the financial base (correct)

    • One of the disadvantages of a corporation is:

  • Ability to easily withdraw assets
  • No requirement to pay taxes
  • Time and cost of formation (correct)
  • Exemption from government regulations

    • What type of business mainly offers professional skills and expertise as its product?

  • Hybrid companies
  • Manufacturing companies
  • Service companies (correct)
  • Merchandising companies

    • Why are corporations subject to greater government regulations compared to other business forms?

    <p>To ensure transparency and legal compliance</p> Signup and view all the answers

    How do shareholders of a corporation typically receive corporate assets?

    <p>When dividends are declared</p> Signup and view all the answers

    What characterizes hybrid businesses?

    <p>They conduct more than one type of business activity</p> Signup and view all the answers

    What are the four factors of production?

    <p>Natural resources, labor, capital, and entrepreneurship</p> Signup and view all the answers

    Which factor of production involves accepting opportunities and risks of starting and running businesses?

    <p>Entrepreneurship</p> Signup and view all the answers

    What do corporations contribute to the economy?

    <p>Reduced liability for owners</p> Signup and view all the answers

    What is a disadvantage of a corporation compared to other business structures?

    <p>Higher tax rates</p> Signup and view all the answers

    Which type of business activity involves producing goods or services for sale in the marketplace?

    <p>Manufacturing products</p> Signup and view all the answers

    What does the factor of capital include in the production process?

    <p>Both buildings and machinery, as well as money used to buy items</p> Signup and view all the answers

    What type of company is San Miguel Corporation an example of?

    <p>Manufacturing</p> Signup and view all the answers

    Which of the following is a disadvantage of a service business compared to a manufacturing company?

    <p>Dependency on skilled employees</p> Signup and view all the answers

    What distinguishes merchandising companies from service businesses?

    <p>They produce finished goods</p> Signup and view all the answers

    Which type of company might be involved in manufacturing, merchandising, and service activities?

    <p>Hybrid</p> Signup and view all the answers

    In a manufacturing company, raw materials are converted into:

    <p>Tangible products</p> Signup and view all the answers

    Which cost is not typically associated with a service business?

    <p>Raw materials</p> Signup and view all the answers

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