Which Statement Is FALSE Considering Both Advantages and Disadvantages of Corporations

question 14

Multiple Choice

Which statement is FALSE considering both advantages and disadvantages of corporations as a legal business organization?

• A) Perhaps the greatest advantage of corporations is that their owners (the shareholders) enjoy limited liability-limited to the value of their shares.
• B) Legally the corporation continues to exist even if one or more owners cease to be owners.
• C) Corporations usually are not as well positioned as proprietorships and partnerships to raise large sums of financial capital.
• D) Separation of ownership and control is a disadvantage of the corporate structure; owners and managers may have different incentives.

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Definitions:

British Blockaded

Refers to historical instances where British naval forces imposed a blockade on enemy ports to restrict and control maritime traffic and goods.

Embargo Act

Legislation enacted by the U.S. Congress in 1807 prohibiting American ships from trading in all foreign ports, in response to British and French restrictions on U.S. trade.

Revolutionary War

Also known as the American Revolution, a conflict between thirteen American colonies and British rule from 1775 to 1783 that led to the colonies' independence.

Townshend Acts

1767 parliamentary measures (named for the chancellor of the Exchequer) that taxed tea and other commodities and established a Board of Customs Commissioners and colonial vice-admiralty courts.