1) Intro

Question 1

corporation: def

Answer 1

separate legal entity from its owners (shareholders)

Question 2

chs of a corporation

Answer 2

1) perpetual existence
2) centralized management of assets/business
3) limited liability for the owners (shareholders)
4) free transferability of ownership interest (shares)

Question 3

corporation: advantage

Answer 3

easy to raise capital

Question 4

corporation: disadvantage

Answer 4

double taxation

Question 5

double taxation: def

Answer 5

1) tax profits first as corporate income

2) then, distribute profits to shareholders as dividends and taxed again as income to shareholder

Question 6

corporate structure: board

Answer 6

directors, responsible for governing the corp

Question 7

corporate structure: officers

Answer 7

appointed by board, responsible for managing the conduct of business.
are agents of the corp.

Question 8

corporate structure: owners

Answer 8

shareholders. generally no control over management.

Question 9

cues to analyze corporations

Answer 9

“directors”
“officers”
“shareholders”

Question 10

corporation: centralized mgt of business?

Answer 10

yes (governed by board of directors + day to day by agents: officers)

Question 11

corporation: operational flexibility?

Answer 11

no – significant adminsitratve formalities

Question 12

corporation: liability protection for owners?

Answer 12

yes

Question 13

corporation: filing requirementsS?

Answer 13

yes: articles of incorporation
+ bylaws
+ fees

Question 14

corporation: required formalities?

Answer 14

yes
annual shareholder meeting
strict bookkeeping
etc

Question 15

corporation: double taxation?

Answer 15

yes

tax profits both at corporate level and shareholder

Question 16

close corporation: centralized management of the business?

Answer 16

not nec. – might have board, but shareholders can instead elect to manage it themselves

Question 17

close corporation: operational flexibility?

Answer 17

no – significant admin formalities

Question 18

close corporation – liability protection for owners?

Answer 18

yes

BUT can pierce the corporate veil

Question 19

close corporation – filing reqs?

Answer 19

yes

Question 20

close corporation – required formalities?

Answer 20

yes

Question 21

close corporation – double taxation?

Answer 21

yes: corporate levle + shareholder level

Question 22

LLC: centralized management of the business?

Answer 22

optional – can be manager-managed OR member managed

Question 23

LLC: operational flexibility?

Answer 23

yes – few if any admin formalities

Question 24

LLC: liability protection for owners?

Answer 24

yes, but can pierce the corporate veil

Question 25

LLC: filing reqs?

Answer 25

yes

• -articles of organization
• -fee

Question 26

LLC: required formalities?

Answer 26

yes, but limited

–usu only need to file annual reports

Question 27

LLC: double taxation?

Answer 27

no:

–taxed only after “passing through” to the owners/members of LLC

Question 28

general partnership: centralized mgt of businss?

Answer 28

no

all GPs have equal right to manage business

Question 29

general partnership: operational flexibility?

Answer 29

yes

few if any admin formalities

Question 30

general partnership: liability protection for owners?

Answer 30

no

Question 31

general partnership: filing requirements?

Answer 31

no

Question 32

general partnership: required formalities?

Answer 32

no

Question 33

general partnership: double taxation?

Answer 33

no – taxed only after “passing through” to owners (partners)