Robert Is Seeking Additional Capital to Expand ABC Inc

question 44

Multiple Choice

Robert is seeking additional capital to expand ABC Inc. In order to qualify ABC as an S corporation, which type of investor group could Robert obtain capital from?

• A) 30 different partnerships
• B) 10 different C corporations
• C) 90 nonresident individuals
• D)120 unrelated resident individuals
• E)None of these

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Definitions:

Authorized Stock

The amount of stock that a corporation is authorized to sell as indicated in its charter.

Corporate Charter

A legal document issued by a governmental authority that establishes a corporation and outlines its rights and obligations.

Initial Capital

The amount of money used to start a business or investment.

Owners' Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest of shareholders or owners.