Quiz 5 Corporations

Question 1

Public Corporations

Answer 1

A corporation formed by the government for some public purpose (ex. U.S. Postal Service)

Question 2

Private Corporations

Answer 2

A corporation created either wholly or in part of private benefit, or FOR PROFIT

Question 3

Nonprofit Corporations

Answer 3

A corporation formed for the purpose other than making a profit (ex. private hospitals, colleges, and charities)

Question 4

Close Corporations

Answer 4

One whose shares are held by relatively few persons and is often operated like a partnership

Question 5

S Corporations

Answer 5

A close corporation that meets specific requirements is allowed to make a tax-election to be taxed as a partnership.

Question 6

What are some
S Corporation requirements (4)

Answer 6

1. corporation must be domestic
2. corporation has no more than 100 shareholders
3. corporation must have only one class of stock
4. no shareholder of the corporation may be a nonresident alien

Question 7

What is a S Corporation tax-election

Answer 7

The corporation elects to pass corporate income, losses, and deductions, to their shareholders for federal tax purposes.

Question 8

Domestic Corporation

Answer 8

A corporation is formed in one state and does business in that state

Question 9

Foreign Corporation

Answer 9

A corporation that is formed in one state but does business in another state

Question 10

Alien Corporation

Answer 10

A corporation formed in another country that is doing business in the United States

Question 11

When is the Corporate Veil pierced

Answer 11

When the corporation no longer has a separate identity

Question 12

Resulting Consequences of Corporate Veil Being pierced (2)

Answer 12

1. Shareholders may lose limited liability
   protection
2. and be held personally liable tor corporate debts.

Question 13

Example of a Nonprofit Corporation

Answer 13

Private hospitals, colleges, and charities

Question 14

Example of a Public Corporation

Answer 14

U.S. Postal Service