Types of Corporations and Their Structures PDF

Types of Corporations and Their Structures Answers 1. What is one of the chief advantages of forming a corporation? A. Unlimited liability B. Automatic profit sharing C. Limited liability D. No need for a board of directors Answer: Limited liability (C) Limited liability is a key advantage of formin...

Types of Corporations and Their Structures Answers 1. What is one of the chief advantages of forming a corporation? A. Unlimited liability B. Automatic profit sharing C. Limited liability D. No need for a board of directors Answer: Limited liability (C) Limited liability is a key advantage of forming a corporation as it protects the personal assets of shareholders. 2. Who owns a corporation? A. Its stockholders (or shareholders) B. The CEO C. The government D. Its employees Answer: Its stockholders (or shareholders) (A) Corporations are owned by stockholders or shareholders who hold ownership interest in the company. 3. What does double taxation mean for corporations? A. Taxing profits twice B. A tax for international corporations C. Taxing profits and salaries D. Taxing profits, then dividends Answer: Taxing profits, then dividends (D) Double taxation for corporations refers to taxing profits at the corporate level and then dividends at the shareholder level. 4. What business model prioritizes shared ownership and democratic decision-making? A. C Corporation B. Cooperative (coop) C. LLC D. S Corporation Answer: Cooperative (coop) (B) A cooperative (coop) prioritizes shared ownership and democratic decision-making among its members. 5. In which business entity do shareholders have limited liability for the company's debts? A. C Corporation B. S Corporation C. Sole Proprietorship D. General Partnership Answer: C Corporation (A) In a C Corporation, shareholders enjoy limited liability, meaning their personal assets are protected from the company's debts. 6. Which form of business organization involves equitable growth across sectors? A. Cooperatives (coops) B. S Corporation C. C Corporation D. Joint Ventures Answer: Cooperatives (coops) (A) Cooperatives (coops) prioritize equitable growth across sectors through shared ownership and democratic decision-making. 7. What role do cooperatives play in the global business landscape? A. Enhancing corporate restructuring B. Encouraging hierarchical decision-making C. Promoting individual ownership D. Advocating for unlimited liability Answer: Enhancing corporate restructuring (A) Cooperatives play a role in enhancing corporate restructuring, partnerships, and global investments in the business landscape. 8. Which specialized business entity offers tax benefits to its members? A. General Partnership B. LLC C. (Cooperative) Coop D. S Corporation Answer: (Cooperative) Coop (C) (Cooperative) Coops offer tax benefits to members due to their shared ownership and collaborative model. 9. What is the significance of partnerships and mergers for cooperatives? A. Restricting global investments B. Undermining cooperatives' objectives C. Promoting corporate expansion D. Encouraging individual ownership Answer: Promoting corporate expansion (C) Partnerships and mergers support corporate expansion efforts of cooperatives, facilitating growth through collective efforts. 10. What key aspect of cooperatives underscores their importance in the business landscape? A. Promoting hierarchical structures B. Fostering inclusivity and democratic decision-making C. Encouraging exclusive ownership D. Discouraging collaborative models Answer: Fostering inclusivity and democratic decision-making (B) The importance of cooperatives in the business landscape is highlighted by their emphasis on inclusivity, shared ownership, and democratic decision-making.