Identify Which of the Following Statements Is True

question 34

Multiple Choice

Identify which of the following statements is true.

• A)Formation of a partnership requires legal documentation.
• B)An individual engaged in the active conduct of a business must elect not to be taxed as a partnership.
• C)A partnership exists as long as there are at least two individuals or entities engaged in the active conduct of a trade or business or a financial operation, and the business is not a trust or a corporation.
• D)All of the above are false.

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Definitions:

Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell shares of a stock at a specified price within a specified time period.

Tax Treatment

The application of tax laws and regulations to various financial transactions, determining how they are taxed.

Executive and Company

This term refers to the relationship or contractual agreements between a company's management, particularly its executive officers, and the company itself.

Covenants Restricting

Clauses in loan agreements that impose limits on the actions of the borrower to protect the interests of the lender.