True or false Corporations are legal entities separate from their owners and offer the advantage of limited liability to the shareholders__________________________. Common stock carries voting privileges while preferred stock gives up this right to receive a dividend preference________________________. The board of directors who are responsible for dividends creates the liability for dividends on the declaration date ___________________________.
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Q: the advantage of a corporation from a partnership is
A: Answer: e. All of the above
True or false
- Corporations are legal entities separate from their owners and offer the advantage of limited liability to the shareholders__________________________.
- Common stock carries voting privileges while
preferred stock gives up this right to receive a dividend preference________________________. - The board of directors who are responsible for dividends creates the liability for dividends on the declaration date ___________________________.
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- Under the corporate form of business organization, Group of answer choices a)ownership rights are easily transferred b)a stockholder is personally liable for the debts of the corporation c)stockholders’ acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation d)stockholders wishing to sell their corporate shares must get the approval of other stockholdersIt is frequently stated that the one purpose of the preemptive right is to allow individuals to maintain their proportionate share of the ownership and control of a corporation.a. How important do you suppose control is for the average stockholder of a firm whose shares are traded on the New York Stock Exchange?b. Is the control issue likely to be of more importance to stockholders of publicly owned or closely held (private) firms?Andrea has prepared the following list of statements about corporations.Identify each statement as true or false. 1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership. TrueFalse 2. Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation. TrueFalse 3. When a corporation is formed, organization costs are recorded as an asset. TrueFalse 4. Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation. TrueFalse 5. The number of issued shares is always greater than or equal to the number of authorized shares. TrueFalse 6. A journal entry is required for the authorization of capital stock. TrueFalse 7.…
- Select the best term for each definition below. Definitions Terms a. Shareholders can lose no more than the amount they invest in the company. b. Corporate earnings are taxed twice—at the corporate level and individual shareholder level. c. Like an S corporation, but there are no limitations on the number of owners as in an S corporation. d. Traces the line of authority within the corporation. e. Allows for legal treatment as a corporation, but tax treatment as a partnership. f. Has stock traded on a stock exchange such as the New York Stock Exchange (NYSE). g. The first time a corporation issues stock to the public. h. Describes (a) the nature of the firm’s business activities, (b) the shares to be issued, and (c) the composition of the initial board of directors.Which of the following statements is NOT correct about the rights granted to common stockholders? Group of answer choices a. Stockholders may transfer their right to vote to a second party by means of a proxy. b. Dividends due to common stockholders are cumulative. c. Common stockholders have the right to elect a firm's directors. d. In large, publicly traded firms, managers typically have some stock but their personal holdings are generally insufficient to win voting control.A corporation cannot be held liable for personal indebtedness of a stockholder even if he is its President. TRUE FALSE By the doctrine of piercing the veil of corporate entity or looking at the substance rather than the form is meant that the law will regard the corporation as a mere association of persons and not of a legal entity separate and distinct from the stockholders. TRUE FALSE No par value shares may not be issued without being fully paid. TRUE FALSE Redeemable shares may be purchased or taken up by the corporation upon the expiration of a fixed period, regardless of the existence of unrestricted retained earnings in the books of the corporation. TRUE FALSE Treasury shares shall have no voting rights as long as they remain in the Treasury TRUE FALSE Treasury shares are entitled to participate in the distribution of dividends. TRUE FALSE
- What is the control requirement of § 351? Describe the effect of the following in satisfying this requirement: A shareholder renders only services to the corporation for stock. A shareholder renders services and transfers property to the corporation for stock. A shareholder has only momentary control after the transfer. A long period of time elapses between the transfers of property by different shareholders.Which of the following is not a characteristic of the commonstock of a large, publicly owned corporation?a. The shares may be transferred from one investor toanother without disrupting the continuity of businessoperations.b. Voting rights in the election of the board of directors.c. A cumulative right to receive dividends. d. After issuance, the market value of the stock is unre-lated to its par value.the advantage of a corporation from a partnership is a. The death of a shareholder will not dissolve the corporation because its power of succession. b. Its management is centralized on the board of director c. shareholders have limited liability d. shareholders are not general agents of the business e. All of the above
- True or False: An S Corporation will not be treated as having more than one class of stock solely because of differences in voting rights (i.e. both voting and non-voting common stock).Direction: Write T if the statement is correct and F if the statement is incorrect. On the space provided, explain using the concepts discussed why your answer to a statement is T or F. 1. A corporation can be formed by mere agreement among shareholders. 2. Shareholders are not liable to corporate obligations in excess of their contribution. 3. Authority of the corporation to operate has to be granted by the state. 4. Death of a shareholder will dissolve the corporation. 5. Shares cannot be transferred without the consent of the other shareholders. 6. All incorporators are subscribers but a subscriber need not be an incorporator. 7. The ultimate control of the corporation rests with the board of directors. 8. Shareholders can transact business on behalf of the corporation. 9. All incorporators are shareholders but not all shareholders are incorporators. 10. In a corporation, minority shareholders are compliant to the wishes of the majority.The following are the characteristics of a close corporation, except: a. Any action by the directors of a close corporation without a meeting shall nevertheless be deemed valid. b. Pre-emptive right does not extend to all stock issuances. c. Deadlock in the board is settled by the SEC upon the written petition by any stockholder. d. A stockholder may withdraw and avail of his right of appraisal.