Which of the Following Statements About the Operation of a Corporation

question 9

Multiple Choice

Which of the following statements about the operation of a corporation is correct?

• A)A corporation receives its charter from the federal or a provincial government.
• B)A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business.
• C)Owners of a corporation have unlimited liability for any claims against their company.
• D)A corporation tends to be much easier to set up than a sole proprietorship or partnership.

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Definitions:

Profit-Maximizing

A strategy or level of production where a firm makes the highest possible profit.

Firm

A business organization, such as a corporation, limited liability company, partnership, or sole proprietorship, that sells goods or services.

Fixed Costs

Business expenses that are not affected by the level of goods or services produced by the business, such as rent, salaries, and insurance.

Price-Taking

A market condition where individual buyers or sellers have no influence over the price of a product due to its abundance in the market and the presence of many competitors.