To Ease a Liquidity Problem, All of the Shareholders of Osprey

question 102

True/False

To ease a liquidity problem, all of the shareholders of Osprey Corporation contribute additional cash to its capital.
Osprey has no tax consequences from the contribution.

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Definitions:

Certificate of Authority

An official document issued by regulatory authorities granting permission for a company to do business in a particular jurisdiction.

Foreign Company

A foreign company is a business entity that is incorporated in a country other than where it conducts its majority operations or where its principal investors reside.

LLC

stands for Limited Liability Company, a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Joint Venture

A business arrangement in which two or more parties agree to pool resources for the purpose of accomplishing a specific task.