Chapter 39 Flashcards
What is a corporation?
One or more shareholders, formed by articles of incorporation, owner is shareholder, ownership is shares.
How does upper-level management of corporations work?
Board of directors is elected by shareholders and responsible for management.
How does the liability of shareholders work?
Shareholders not personally liable for corporate acts, corporate veil can be pierced.
How does corporate taxation work?
Double taxation, 21% corporate profits + state. 15% on less than $1 billion profits. Shareholders pay tax on dividends.
How does holding companies work?
holding shares in another company, to avoid liability.
What is a close corporation?
Shares are held by relatively few persons and operated like partnership.
What is an S corporation?
Avoids double taxation. Must be domestic, no nonresident aliens, no more than 100 shareholders.
