Nature and Advantages of the Corporation

Question 1

Are shareholders of a corporation personally liable for the debts and obligations of the corporation?

Answer 1

No, subject to a few exceptions.

Question 2

Where is management of corporations centralized?

Answer 2

In the board of directors.

Question 3

How long does a corporation exist?

Answer 3

The corporate entity generally has perpetual existence and continues unaffected by changes in ownership or management.

Question 4

Are shares freely transferable by shareholders?

Answer 4

YES!

Question 5

Are corporations liable for both federal and state income taxes?

Answer 5

Yes.

Question 6

Are corporations subject to double taxation?

Answer 6

Yes. Dividends paid by a corporation are taxable to the shareholders as ordinary income.

Question 7

What MUST the annual report disclose?

Answer 7

1. The corporation’s name and the state or county of incorporation;
2. The date of incorporation or the date admitted to do business in the state;
3. The address of its principal office and the mailing address of the corporation;
4. Its federal employer identification number;
5. The names and business street addresses of its principal officers and directors; and
6. The street address of its registered office and the name of its registered agent.

Question 8

What happens if the corporation fails to file an annual report?

Answer 8

They are barred from bringing any action in the Florida courts until the report is filed, and are also subject to involuntary dissolution.

Question 9

When is a document accepted for filing effective?

Answer 9

On the date and at the time of filing.

• A document may specify a delayed effective date (up to 90 days after filing) and, if desired, an effective time on that date.