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Most States Prohibit Corporations from Paying a Dividend If a Deficit

question 42

True/False

Most states prohibit corporations from paying a dividend if a deficit will occur.


Definitions:

Sole Proprietorship

A business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Dissolving

The process by which a substance breaks down into its constituent parts or is incorporated into a solvent, becoming a solution.

Partnership

A partnership is a legal form of business operation between two or more individuals who share management and profits.

Strict Franchise Agreements

Legal contracts between franchisors and franchisees that dictate the stringent terms and conditions of the franchise operation.

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