Which of the Following Statements Is True of a Corporation

question 125

Multiple Choice

Which of the following statements is true of a corporation?

• A)The liabilities of the corporation can be paid by the personal assets of the shareholders.
• B)Shares of stock cannot be readily bought and sold by investors on the open market.
• C)Shareholders are authorized to sign contracts or make business commitments on behalf of the corporation.
• D)Corporations pay income tax on corporate earnings, and shareholders pay personal income tax on corporate dividends and gains from sale of stock.

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Definitions:

Savings and Loan Association

A financial institution that specializes in accepting savings deposits and making mortgage and other loans.

Voluntary Bankruptcy

The act of an individual or business initiating bankruptcy proceedings on their own accord as a means to manage insurmountable debt.

Order for Relief

A court order that formally begins the process of providing legal relief to a debtor in a bankruptcy case, offering protection from creditors.

Bankruptcy Petitioner

An individual or entity that initiates a bankruptcy case by filing a petition in bankruptcy court.