True/False
Indicate whether the
statement is true or false.
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1.
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All members of a corporation must receive notices of all meetings.
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2.
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A certificate of incorporation should NOT include the purpose of the
corporation.
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3.
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Mr. Lane’s business, A-1 Cuts, Inc. is an open corporation.
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4.
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To form a corporation, a charter is needed.
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5.
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A stockholder has the same financial responsibility as a partner in a
partnership.
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6.
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The stockholders make up the ruling body of a corporation.
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7.
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Corporations are many in number and generally large in size.
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8.
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A nonprofit corporation pays dividends to shareholders.
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9.
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A person must own at least 10 shares of stock to be considered a
stockholder.
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10.
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Each shareholder has only one vote regardless of the number of shares
owned.
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11.
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Stockholders elect members of the board of directors.
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12.
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A joint venture could include an agreement among three contractors to connect 2
cities by building a tunnel under a river.
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13.
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Double taxation is a major advantage for corporations over partnerships.
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Matching
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a. | corporation | j. | close corporation | b. | charter | k. | open corporation | c. | stockholders | l. | prospectus | d. | shares | m. | joint venture | e. | dividends | n. | virtual corporation | f. | board of directors | o. | limited liability
corporation | g. | officers | p. | nonprofit corporation | h. | capital stock | q. | quasi-public corporation | i. | proxy | r. | cooperative |
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14.
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Owners of a corporation.
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15.
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Top executives who are hired to manage the business.
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16.
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An organization that does not pay taxes and does not exist to make a
profit.
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17.
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Equal parts of the division of ownership of a corporation.
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18.
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A written authorization for someone to vote on behalf of the person signing the
document.
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19.
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The general term applied to the shares of ownership of a corporation.
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20.
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A business that is important to society, but lacks the profit potential to
attract private investors, and is often operated by local, state, or federal government. (EX: PA
Turnpike)
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21.
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A network of companies that form alliances among themselves as needed to take
advantage of fast-changing market conditions. (EX: EBAY)
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22.
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A corporation that does not offer its shares of stock for public sale.
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23.
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A business owned by a group of people and authorized by the state in which it
is located to act as though it were a single person.
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24.
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An agreement among two or more businesses to work together to provide a good or
service.
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25.
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A business owned and operated by its user-members for the purpose of supplying
themselves with goods and services (EX: Credit Union)
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26.
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A corporation that offers its shares of stock for public sale.
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27.
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Profits distributed to stockholders on a per share basis.
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28.
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A special type of corporation that is taxed as if it were a sole propietorship
or a partnership.
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29.
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Ruling body of a corporation.
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30.
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Official document through which a state grants the power to operate as a
corporation.
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31.
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A formal summary of the chief features of a business and its stock
offering.
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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32.
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If the corporation fails, stockholders are responsible for
a. | only the value of the assets of the corporation | c. | all of the debts of the
corporation | b. | only the amount owed in dividends | d. | only the amount
invested |
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33.
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Which of the following qualify as a legal name for a corporation?
a. | Land and Company, Ltd. | c. | Lane and Co. | b. | Lane, Limited | d. | Lane Inc. |
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34.
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A shareholder CANNOT
a. | transfer ownership to others | c. | share in the net proceeds should
the corporation go out of business | b. | vote for members of the ruling body of the
corporation | d. | create
contracts for the corporation |
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35.
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Once a corporation receives its charter, it can
a. | add other purposes or activities to the business if the state approves the charter
changes | c. | never change the purpose of the business | b. | change the purpose
of the business without the state approva. | d. | operate any kind of business chosen by the board of
directors |
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36.
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An official document giving power to run a corporation is a
a. | proxy | c. | shareholder certificate | b. | document
certificate | d. | charter |
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37.
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A nonprofit organization is an organization that:
a. | pays taxes and exists to make a profit | c. | does not pay taxes and does not
exist to make a profit | b. | pays dividends to
shareholders | d. | pays taxes and
does not exist to make a profit |
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38.
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Which activities are corporations allowed to practice?
a. | make contracts but not borrow money | c. | make contracts but not own
property | b. | make contracts, borrow money, and be sued | d. | make contracts but not be
sued |
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39.
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Limited liability companies have
a. | higher income tax rates than partnerships and unlimited liability | c. | higher income tax
rates than partnerships and limitied liability | b. | lower income tax rates than partnerships and
limited liability | d. | lower
income tax rates than partnerships and unlimited liability |
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40.
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An advantage of corporations in relation to partnerships is that
a. | shareholders can transfer ownership easily | c. | corporations have a tax
advantage | b. | corporations have a limited life | d. | shareholders have unlimited financial
liability |
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