SWFT Corp Partner Estates Trusts
42nd Edition
ISBN: 9780357161548
Author: Raabe
Publisher: Cengage
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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.
A stockholder dissatisfied with the management of the corporation done by the Board of Directors surrenders his certificate of stocks and demands the return of the subscription price paid by him. Can he rightfully do this? Explain.
Which of the following is a disadvantage of the corporate form of organization?
difficulty in raising capital
unlimited liability of the owners
finite life of the organization
the tax treatment of dividends
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- Which of the following is not something that corporations can do with their profits? a. Pay income tax to the government b. They can do all of these. c. Pay them to shareholders d. Hold profits within the firmarrow_forwardDoes the offer of receiving cash dividend and stock repurchase make any differences to an individual shareholder of the company? Why? (Assume that the company will spend same amount of money on either alternative.)arrow_forwardWhy would a corporation purchase the stock of another corporation? a. To prevent double taxation of its shareholders b. Because dividends received by a corporation are partially tax-exempt c. It is equivalent to a tax carried forward d. It is equivalent to a tax carried backarrow_forward
- If a company’s constitution does not contain rules governing the forfeiture of shares, then the company: Select one: A. can register the shares in the name of another shareholder but cannot receive payment from that shareholder. B. may forfeit shares and reissue them at a later date. C. may forfeit shares but not reissue them. D. cannot forfeit shares.arrow_forwardA corporation may not deduct dividends paid to shareholders but is permitted to deduct reasonable compensation? True or Falsearrow_forwardWhich of the following statements is false concerning forms of businessorganization? a. A corporation has tax advantages over the other forms of businessorganization.b. It is easier for a corporation to raise large sums of money than it isfor a sole proprietorship or partnership.C. A sole proprietorship is an easy type of business to form.d. Owners Of sole proprietorships and partnerships have personalliability for the debts of the business while owners of corporationshave limited legal liability.arrow_forward
- Which of the following liquidating dividend is not legal? a. Liquidating dividend of a continuing merchandising corporation b. Liquidating dividend of a mining corporation c. Liquidating dividend of a wasting asset corporation d. Liquidating dividend of a corporation at the state of bankruptcyarrow_forwardCan the members of a non-stock corporation receive compensation?arrow_forwardHakot Corporation invested its funds in a foreign corporation with the approval of its board of directors. Perfect, a shareholder, questioned the investment made as the same was not approved by the required votes of the stockholders. Immediately thereafter, Hakot Corporation called a stockholders' meeting to have such investment ratified. May the illegal investment be ratified? Explain.arrow_forward
- Owners of preference shares often do not have: A Voting rights. B The right to sell their shares on the open market. C Preference to dividends. D Ownership rights to assets of the corporation.arrow_forwardwhich characteristics of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation ?arrow_forward
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