MindTap: Worksheet 18.1: Nature and Classification

There is no difference between a public corporation and a publicly held corporation.

False

Select the three names that close corporations are often called.

closely held corporations family corporations privately held corporations

A corporation is a legal entity:

created pursuant to a state statute

Corporations _____ enjoy many of the same rights and privileges under state and federal law that people enjoy.

do

One main disadvantage of the corporate form of business is

double taxation of distributed income

One of the key advantages of the corporate form of business is

limited liability of ownership

To become an S corporation, a corporation must meet specific criteria, with restriction on the _____ of shareholders, as well as the types of _____ that can be issued.

number stock

Management of a close corporation often resembles that of a _____, but a corporation must meet the statutory requirements to remain a corporation. Often, shareholders in a close corporation _____ the transferability of shares. If a majority shareholder misappropriates company funds, the normal remedy for the other shareholders is to have their shares _____ to determine value and then _____ that value.

partnership restrict appraised receive

Match the term with the appropriate definition.

Alien corporation: a corporation doing business in a state but organized in another country Domestic corporation: in a given state, a corporation that is organized under the laws of that state Foreign corporation: in a given state, a corporation that does business in the state without being incorporated in that state

Match the term with the appropriate definition.

Retained earnings: the portion of the corporation's profits or income that is not paid out to shareholders Dividends: a distribution of profits or income to shareholders

The _____, or owners, of a corporation elect the _____ who then hire the _____ to run the daily operations.

Shareholders directors officers

A corporation automatically will be taxed under subchapter C unless it elects to become an S corporation.

True