Daily Double Ch. 4
Which of the following statements about corporations is true? A. A promoter files articles of incorporation with the state government to create a corporation B. When a corporations liabilities exceed its assets, its creditors can reach the personal assets of the shareholders C. A corporation need not establish books of accounts D. When an employee or director commits a tort or crime while conducting corporate business, the corporation is not liable for the consequences
A. A promoter files articles of incorporation with the state government to create a corporation
Corporations distribute their aftertax income to their shareholders as __________?
Dividends
A partnership offers Limited Liability to its owners
F
An S corporation pays double tax on its income
F
Equity holders claims are always satisfied before creditors claims
F
In a limited liability company, the owners are referred to as interest holders
F
In the context of the capital structure of corporations, equity capital has a short-term horizon
F
Online trading services provide professional guidance to investors
F
Sole proprietorships are mutual agencies
F
in a limited partnership, the limited partners manage the business and are personally liable for all losses
F
Common stockholders share all three property rights associated with stock ownership in proportion to their holdings
T
Corporations are artificial persons created under the law of a state
T
Corporations incur the disadvantage of double taxation
T
In general, the creditors of a corporation cannot reach the personal assets of the shareholders to satisfy the corporations obligations
T
The Securities Act of 1933 seeks to ensure full disclosure of all material facts about the investment opportunity to offerees before they invest
T
The owners of a corporation are called Stockholders
T
Where mergers or direct acquisitions fail, a takeover can be attempted
T
A shareholder derivative suit is brought by a minority shareholder, but any recovery inures to the corporation
T
Although shareholders are the owners of a corporation, control rests with the board
T
Blue Sky laws are primarily applicable to solely intrastate offerings
T
Closely held corporations face the loss of limited liability through application of the doctrine known as piercing the corporate veil
T