BUS 10 Chapter 4 – Flashcards
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Most stockholders attend a corporation's annual meeting and vote in person.
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False
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About 85 percent of all business firms in the United States are sole proprietorships.
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False; 72%
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Unlike a person, a corporation exists only on paper.
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True
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A corporation chartered in Kansas and doing business in Kansas is known as a domestic corporation.
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True
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The amount paid for stock is the most a shareholder can lose in the corporate form of ownership.
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True
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Shareholders of an S-corporation are taxed as if they were owners in a partnership.
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True
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Units of ownership in a master limited partnership (MLP) are often sold on organized security exchanges.
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True
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A limited-liability company extends the concept of personal-asset protection to small-business owners.
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True
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Surplus funds of a not-for-profit organization are distributed to members of the board of directors.
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False
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The corporation, partnership, and sole proprietorship are the three most common forms of business ownership in the United States.
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True
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The courts have held that an oral partnership agreement is not legally binding and, therefore, cannot be enforced.
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False
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A syndicate is a temporary association of individuals or firms organized to perform a specific task that requires a large amount of capital.
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True
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A corporation is an artificial person created by law.
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True
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All not-for-profit corporations rely solely on volunteers to perform services of the organization.
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False; they have employees
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Articles of partnership are a legal document issued by the secretary of state.
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False; it can be issued by an attorney
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The weakness of one partner may be offset by another partner's strength.
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True
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An S-corporation can have no more than twenty stockholders.
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False; it can have no more than 100 stockholders
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Compared to a corporation, a partnership is more difficult and expensive to establish.
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False; a corporation is more difficult and expensive to establish
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Corporations are forbidden by law to enter joint ventures.
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False; they may enter into joint ventures
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Profits of a large corporation are taxed twice, once as corporate income and again as personal income of stockholders.
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True
