Quiz on Corporations

What is a corporation?

• A type of partnership

• A business entity legally separate from its owners

• A small business owned by one person

• A government agency

What is the role of shareholders in a corporation?

• They manage daily operations

• They elect a board of directors

• They are responsible for debts

• They work as employees

Which of the following is an example of a corporation?

• Microsoft Corporation

• John's Family Diner

• Local Grocery Store

• City Library

How do corporations often do business?

• Under their owners' names

• Under business names

• Without any name

• Using personal names

What is the first step in setting up a corporation?

• Issuing shares of stock

• Filing Articles of Incorporation

• Choosing a business name and checking its availability

• Appointing a board of directors

Which of the following is a reason to choose a corporation?

• Limited liability

• Easy to dissolve

• Simple management structure

• No access to capital

What is one of the benefits corporations have regarding capital?

• Corporations cannot raise capital

• Corporations have limited access to capital

• Corporations can raise large amounts of capital through the issuance of stock

• Corporations rely solely on personal savings for capital

What is a key feature of corporations in terms of liability?

• Unlimited liability for shareholders

• Limited liability for shareholders

• Liability only for directors

• No liability for anyone

What is double taxation in the context of corporations?

• Taxation of corporate income and dividends

• Taxation of only corporate income

• Taxation of only dividends

• No taxation on corporate earnings

Why are dividends considered part of double taxation?

• They are taxed as corporate income

• They are taxed as personal income to shareholders

• They are not taxed at all

• They are taxed only if reinvested