Corporations CHAPTER 12 HEHEHEHE Flashcards
Owners of a corporation are called _____
Shareholders
One of the key advantages of the corporate form is the limited liability of its owners. True or False?
True
A corporation is subject to which of the following: Double Taxation, Criminal Liability, Tort Liability, or All of the above?
All of the above
When a corporation earns profits, it must issue dividends to the shareholders; it may not retain earnings. True or False?
True
The ___ is the document is filed with the appropriate state official, usually the secretary of state, when a business is incorporated and that contains basic information about the corporation.
Articles of Incorporation
The following is a type of for-profit corporation, available by statute in a number of states, that seeks to have a material positive impact on society and the environment.
Benefit Corporation
The Board of ___ is the ultimate authority in every corporation.
Directors
When deciding which form of business organization to choose, business persons normally consider several factors, including the ability to raise capital. True or False?
True
Shareholders have all if the responsibility for the daily management of the corporation. True or False?
False
A rule under which courts will not hold corporate officers and directors liable for honest mistakes of judgment and bad business decisions that were made in good faith.
Business Judgement Rule
A distribution of corporate profits to the corporation’s shareholders in
proportion to the number of shares held.
Dividend
The portion of a corporation’s profits that has not been paid out
as dividends to shareholders.
Retained Earnings
A legal entity created and recognized by state law.
Corporation
The internal rules of management adopted by a corporation at
its first organizational meeting.
Bylaws
The action of a court to disregard
the corporate entity and hold the shareholders personally liable
for corporate debts and obligations.
Piercing the corporate veil
