Corporations CHAPTER 12 HEHEHEHE Flashcards

1
Q

Owners of a corporation are called _____

A

Shareholders

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2
Q

One of the key advantages of the corporate form is the limited liability of its owners. True or False?

A

True

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3
Q

A corporation is subject to which of the following: Double Taxation, Criminal Liability, Tort Liability, or All of the above?

A

All of the above

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4
Q

When a corporation earns profits, it must issue dividends to the shareholders; it may not retain earnings. True or False?

A

True

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5
Q

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.

A

Articles of Incorporation

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6
Q

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.

A

Benefit Corporation

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7
Q

The Board of ___ is the ultimate authority in every corporation.

A

Directors

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8
Q

When deciding which form of business organization to choose, business persons normally consider several factors, including the ability to raise capital. True or False?

A

True

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9
Q

Shareholders have all if the responsibility for the daily management of the corporation. True or False?

A

False

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10
Q

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.

A

Business Judgement Rule

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11
Q

A distribution of corporate profits to the corporation’s shareholders in
proportion to the number of shares held.

A

Dividend

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12
Q

The portion of a corporation’s profits that has not been paid out
as dividends to shareholders.

A

Retained Earnings

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13
Q

A legal entity created and recognized by state law.

A

Corporation

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14
Q

The internal rules of management adopted by a corporation at
its first organizational meeting.

A

Bylaws

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15
Q

The action of a court to disregard
the corporate entity and hold the shareholders personally liable
for corporate debts and obligations.

A

Piercing the corporate veil

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