Which of the Following Is Correct with Regard to Co-Operatives

question 117

Multiple Choice

Which of the following is correct with regard to co-operatives?

• A) Co-operatives are not allowed to deduct patronage refunds to members out of before-tax income.
• B) Members have an incentive to invest in equity capital of the co-operative.
• C) Voting and financial control of the co-operative is typically held by a few wealthy individuals.
• D) Double taxation affects co-operatives more negatively than corporations.
• E) The democratic voting arrangements and dividends based purely on patronage discourage some entrepreneurs from forming or joining a co-operative.

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Definitions:

Parol Evidence Rule

A legal principle that prevents parties from presenting extrinsic evidence to modify, vary, or contradict the terms of a written contract.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party, if the latter has relied on that promise to their detriment.

Parol Evidence Rule

A legal rule that excludes the admission of oral statements, written agreements outside the contract, or preliminary agreements in interpreting a written contract.

Parol Evidence Rule

The parol evidence rule is a legal principle that prevents parties in a written contract from presenting external evidence that contradicts or adds to the written terms of the contract.