Question

True or false?
1. A corporation is an entity separate and distinct from its owners.
2. As a legal entity, a corporation has most of the rights and privileges of a person.
3. Most of the largest U.S. corporations are publicly held corporations.
4. Corporations may buy, own, and sell the property; borrow money; enter into legally binding contracts, and sue and be sued.
5. The net income of a corporation is taxed as a separate entity.

Answer 1

Answer:

1. True

2. True

3. False

4. True

5. False

Explanation:

1. True. Corporate governance is both a strength and a weakness.  Management of corporations is the community of senior executives who lead and direct the company.

2. True. As a legal entity corporation, it would have much of a person's rights.

3. False. When a company is created, the cost to the organization is recorded as an expense.

4. True. Common shareholders are the company's founders, who therefore have voting rights.

5. False. The Number of shares authorized is higher than the number of shares issued.