Which of the Following Statements Is NOT True of a Corporation

question 64

Multiple Choice

Which of the following statements is NOT true of a corporation?

• A)It can incur debt that is an obligation of the corporation but not of its individual owners.
• B)It is an entity separate from the individuals who own it.
• C)It is legally obliged to distribute all profits to shareholders.
• D)It can enter into contracts.
• E)It has the right to sue and be sued.

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Definitions:

Fundamental Policy

Core principles or philosophies that guide the decision-making process within an organization or government.

Definite Enough Terms

Clarity and specificity in contractual terms that define and bind the agreement's obligations and expectations.

State Legislature

The lawmaking body within a state, responsible for creating legislation and policies governing the state.

Illegal

Activities or actions that are prohibited by law and subject to penalties.