Worksheet 18.1: Nature and Classification

Dividends

A distribution of profits or income to shareholders

Benefit Corporation

A for-profit corporation that seeks to have a material positive impact on society and the environment.

One main disadvantage of the corporate form of business is_____

Double taxation of distributed income

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

False

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

Limited Liability of Owneraship

Under modern criminal law, a corporation ______ be held liable for the criminal acts of its employees. The punishment for guilt of a crime by a corporation consists of __________. Corporations may be liable for the torts of their _________ if committed within the scope of the agency.

May Fines Torts Within

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

Benefit corporations differ from traditional corporations in three main ways. The main purpose is to benefit the _____ so directors must consider the impact of their decisions on society and the ________ . Shareholders have an additional right of private action, called a ________ , that allows them to sue the corporation for failure to pursue the purpose. Finally, benefit corporations must issue an annual_______ on its performance and include a third-party standard of assessment.

Public Environment Benefit Enforcement Proceeding Benefit Report

Today most state corporate statutes are at least partially based on the ______

Revised Model Business Corporation Act

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

Shareholders Directors Officers

Retained Earnings

The portion of the corporation's profits or income that is not paid out to shareholders

Alien Corporation

a corporation doing business in a state but organized in another country

Professional Corporation

a corporation formed with members of certain professions

Nonprofit Corporation

a corporation formed without concern of making money

Most corporate enterprises in the United States can be considered:

close corporations.

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 by state statute.

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

do

Foreign Corporation

in a given state, a corporation that does business in that state without being incorporated in that state

Domestic Corporation

n a given state, a corporation that is organized under the laws of that state

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

true