BA109 Quiz 5 Latest 2023 with complete solution
Acme Corporation is chartered in Delaware, but its primary area of operation is in
South Carolina. In South Carolina, Acme would be considered a(n) ________
corporation.
foreign
T/F State law requires that individuals creating a partnership file the Articles of
Partnership with the secretary of state.
False
T/F "Double taxation" refers to the fact that corporations are required to pay both
federal and state income taxes.
False
T/F The corporation has the advantage of transferable ownership, which easily
enables the corporation to sell shares to others or to transfer stock through
inheritance.
True
Which form of ownership generally has the least ability to accumulate capital?
Sole proprietorship
T/F Liquidating an S corporation involves several steps, including paying all
taxes and debts, obtaining the written approval of shareholders to dissolve the
company, filing a statement of intent to dissolve with the secretary of state's
office and, finally, distributing all remaining assets of the corporation to
shareholders.
True
T/F One disadvantage of an S corporation is that the cost of many benefits-
insurance, meals, lodging, and others-that are paid to shareholders with 2
percent or more of stock-cannot be deducted as business expenses for tax
purposes and are considered taxable income.
True
T/F In a professional corporation, all shares of stock must be owned and held by
individuals licensed in the profession of the corporation.
True
T/F If a partnership agreement does not exist, the partnership will be governed by
the Uniform Partnership Act.
True
T/F An S corporation can issue both voting and nonvoting common stock to its
shareholders.
True
T/F Changing from one form of ownership to another once a business is up and
running can be difficult, expensive, and complicated.
True
T/F There is no limit to the number of general partners a partnership may have,
but it must have at least one general partner.
True
Which of the following statement(s) is/are true?
All of these
, T/F Stockholders in the corporation have the same kind of liability as do general
partners in a partnership.
False
T/F The limited liability company, like an S corporation, is a form of ownership
that is a cross between a partnership and a corporation.
True
T/F Choosing S corporation status is usually beneficial to startup companies
anticipating net losses and to highly profitable firms with substantial dividends to
pay out to shareholders.
True
T/F A corporation formed and chartered in Kansas is considered a domestic
corporation when doing business in Kansas, and a foreign corporation when
doing business in Missouri.
True
T/F The partnership, like the proprietorship, avoids the disadvantage of double
taxation.
True
T/F A professional corporation is created in the same way as a regular
corporation, and exists to provide the advantages of corporate ownership,
including limited liability, to professionals such as doctors and lawyers.
True
T/F Company founders can become minority stockholders in a corporation but
can never lose their final authority or control over business decisions because
they are the founders.
False
A general partner is personally liable only for the amount of money he has
invested in the partnership.
False
Which of the following is required to form a partnership?
A general partner
A special type of limited partnership in which all partners who, in many states
must be considered to be professionals, are limited partners.
Limited liability partnership (LLP)
The sole proprietorship is the easiest form of ownership to create, but once
formed, it is subject to the greatest number of regulations.
False
Liquidating an S corporation involves several steps, including paying all taxes
and debts, obtaining the written approval of shareholders to dissolve the
company, filing a statement of intent to dissolve with the secretary of state's
office and, finally, distributing all remaining assets of the corporation to
shareholders.
True
Which of the following is a disadvantage of the corporation form of ownership?
Double taxation on profits
Which of the following is not an advantage of the corporate form of ownership?
It is the easiest and least expensive form of ownership to create.
Acme Corporation is chartered in Delaware, but its primary area of operation is in
South Carolina. In South Carolina, Acme would be considered a(n) ________
corporation.
foreign
T/F State law requires that individuals creating a partnership file the Articles of
Partnership with the secretary of state.
False
T/F "Double taxation" refers to the fact that corporations are required to pay both
federal and state income taxes.
False
T/F The corporation has the advantage of transferable ownership, which easily
enables the corporation to sell shares to others or to transfer stock through
inheritance.
True
Which form of ownership generally has the least ability to accumulate capital?
Sole proprietorship
T/F Liquidating an S corporation involves several steps, including paying all
taxes and debts, obtaining the written approval of shareholders to dissolve the
company, filing a statement of intent to dissolve with the secretary of state's
office and, finally, distributing all remaining assets of the corporation to
shareholders.
True
T/F One disadvantage of an S corporation is that the cost of many benefits-
insurance, meals, lodging, and others-that are paid to shareholders with 2
percent or more of stock-cannot be deducted as business expenses for tax
purposes and are considered taxable income.
True
T/F In a professional corporation, all shares of stock must be owned and held by
individuals licensed in the profession of the corporation.
True
T/F If a partnership agreement does not exist, the partnership will be governed by
the Uniform Partnership Act.
True
T/F An S corporation can issue both voting and nonvoting common stock to its
shareholders.
True
T/F Changing from one form of ownership to another once a business is up and
running can be difficult, expensive, and complicated.
True
T/F There is no limit to the number of general partners a partnership may have,
but it must have at least one general partner.
True
Which of the following statement(s) is/are true?
All of these
, T/F Stockholders in the corporation have the same kind of liability as do general
partners in a partnership.
False
T/F The limited liability company, like an S corporation, is a form of ownership
that is a cross between a partnership and a corporation.
True
T/F Choosing S corporation status is usually beneficial to startup companies
anticipating net losses and to highly profitable firms with substantial dividends to
pay out to shareholders.
True
T/F A corporation formed and chartered in Kansas is considered a domestic
corporation when doing business in Kansas, and a foreign corporation when
doing business in Missouri.
True
T/F The partnership, like the proprietorship, avoids the disadvantage of double
taxation.
True
T/F A professional corporation is created in the same way as a regular
corporation, and exists to provide the advantages of corporate ownership,
including limited liability, to professionals such as doctors and lawyers.
True
T/F Company founders can become minority stockholders in a corporation but
can never lose their final authority or control over business decisions because
they are the founders.
False
A general partner is personally liable only for the amount of money he has
invested in the partnership.
False
Which of the following is required to form a partnership?
A general partner
A special type of limited partnership in which all partners who, in many states
must be considered to be professionals, are limited partners.
Limited liability partnership (LLP)
The sole proprietorship is the easiest form of ownership to create, but once
formed, it is subject to the greatest number of regulations.
False
Liquidating an S corporation involves several steps, including paying all taxes
and debts, obtaining the written approval of shareholders to dissolve the
company, filing a statement of intent to dissolve with the secretary of state's
office and, finally, distributing all remaining assets of the corporation to
shareholders.
True
Which of the following is a disadvantage of the corporation form of ownership?
Double taxation on profits
Which of the following is not an advantage of the corporate form of ownership?
It is the easiest and least expensive form of ownership to create.
