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Questions and Answers
A corporation can contract with lenders without affecting the funds or borrowing ability of the owners.
A corporation can contract with lenders without affecting the funds or borrowing ability of the owners.
True
Owners of a corporation can be held personally liable for the failure to repay the corporation's debt.
Owners of a corporation can be held personally liable for the failure to repay the corporation's debt.
False
Corporations are not subject to double taxation as the government only taxes company profits once.
Corporations are not subject to double taxation as the government only taxes company profits once.
False
Publicly traded companies must produce quarterly and annual reports, but are not required to distribute them to current or prospective owners.
Publicly traded companies must produce quarterly and annual reports, but are not required to distribute them to current or prospective owners.
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Hybrid corporations like Limited Liability Companies (LLCs) combine features of partnerships and corporations.
Hybrid corporations like Limited Liability Companies (LLCs) combine features of partnerships and corporations.
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Professional corporations (PCs) are typically formed by joining together licensed professionals such as doctors, lawyers, and engineers.
Professional corporations (PCs) are typically formed by joining together licensed professionals such as doctors, lawyers, and engineers.
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Incorporating as a professional corporation requires the name of the company to contain the PC moniker.
Incorporating as a professional corporation requires the name of the company to contain the PC moniker.
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An S corporation is a small business corporate form with more than 100 shareholders.
An S corporation is a small business corporate form with more than 100 shareholders.
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Not-for-profit corporations do not aim to maximize shareholder wealth.
Not-for-profit corporations do not aim to maximize shareholder wealth.
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Owners in a professional corporation are personally liable for the malpractice of their partners.
Owners in a professional corporation are personally liable for the malpractice of their partners.
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In an S corporation, the income of the corporation passes directly to the owners.
In an S corporation, the income of the corporation passes directly to the owners.
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Foundations, charities, trusts, and associations may incorporate as not-for-profit corporations.
Foundations, charities, trusts, and associations may incorporate as not-for-profit corporations.
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Owners of a corporation do not have limited liability, meaning their personal assets can be used to cover the company's debts.
Owners of a corporation do not have limited liability, meaning their personal assets can be used to cover the company's debts.
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The board of directors is responsible for managing the daily operations of a corporation.
The board of directors is responsible for managing the daily operations of a corporation.
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Corporations cannot easily transfer ownership because it requires complex legal procedures.
Corporations cannot easily transfer ownership because it requires complex legal procedures.
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Shareholders have direct control over daily company operations in a corporation.
Shareholders have direct control over daily company operations in a corporation.
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Bylaws of a corporation include specific procedures for making future changes to the ownership structure.
Bylaws of a corporation include specific procedures for making future changes to the ownership structure.
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Owners of a corporation may lose more than what they paid for their shares in case of company debt.
Owners of a corporation may lose more than what they paid for their shares in case of company debt.
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