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Questions and Answers
What is a true statement about the incorporation of Jeremy and Rita's small business?
What is a true statement about the incorporation of Jeremy and Rita's small business?
- Jeremy and Rita must establish the corporation with a motive for profit. (correct)
- Once the business is set up, Jeremy can set up a competing business as a sole proprietor.
- If either Jeremy or Rita die, the corporation would cease to exist.
- Jeremy and Rita as the principal shareholders must take an active role in management.
What would happen if either Jeremy or Rita die in the context of the incorporated business?
What would happen if either Jeremy or Rita die in the context of the incorporated business?
- The corporation would be dissolved and its assets distributed to the remaining partner.
- The corporation would continue to exist with the surviving partner as the sole owner. (correct)
- The corporation would cease to exist.
- The surviving partner would become the sole owner of the corporation.
What is a restriction for Jeremy after the business is set up as a corporation?
What is a restriction for Jeremy after the business is set up as a corporation?
- Jeremy can transfer the corporation's assets to another entity.
- Jeremy can distribute all profits as dividends without Rita's approval.
- Jeremy can appoint a new board of directors without Rita's consent.
- Jeremy can set up a competing business as a sole proprietor. (correct)
