Five Friends Decide to Form a Corporation Together

question 56

Multiple Choice

Five friends decide to form a corporation together. They wish to participate in corporate management. What must they do to participate?

• A) Nothing, shareholders generally participate in corporate management.
• B) They should form a partnership instead.
• C) They must form an S-corp, as C-corp shareholders are not permitted to participate in corporate management.
• D) They should specify in corporate bylaws that they will participate in corporate management.
• E) They will not be allowed to participate in corporate management as shareholders.

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Definitions:

Rectus Abdominis

A paired muscle running vertically on each side of the anterior wall of the human abdomen, involved in flexing the lumbar spine.

Pectoralis Group

A group of muscles located at the front of the chest, involved in movements of the shoulder and arm.

Clavicle

A long bone that serves as a strut between the shoulder blade and the sternum or breastbone, known colloquially as the collarbone.

Biceps Brachii

A muscle located in the upper arm that allows for the flexion of the elbow and rotation of the forearm.