Corporations

1. Corporations are formal organizations that are set up and run to conduct business activities, engaging in various ventures such as manufacturing, trading, and providing services. They are typically owned by shareholders who invest capital in the company in exchange for ownership stakes represented by shares of stock. Corporations are considered legal entities separate from their owners, providing limited liability protection to the shareholders. They are governed by a board of directors who are responsible for making important decisions, setting strategic goals, and overseeing the company's operations. Corporations play a crucial role in the economy, generating employment opportunities, driving innovation, and contributing to economic growth and development.

What is a corporation?

A) A partnership between two individuals.
B) A legal entity separate from its owners.
C) An informal group of people.
D) A sole proprietorship.

2. Who owns a corporation?

A) Government.
B) Shareholders.
C) Customers.
D) Employees.

3. What is a publicly traded corporation?

A) A non-profit corporation.
B) A corporation whose shares are traded on stock exchanges.
C) A corporation with a single owner.
D) A corporation that is government-owned.

4. How are dividends distributed to shareholders taxed?

A) Tax-free.
B) Taxed at a flat rate.
C) Only taxed at the corporate level.
D) As capital gains or ordinary income.

5. What is the Securities and Exchange Commission (SEC) responsible for?

A) Regulating the securities industry.
B) Collecting corporate taxes.
C) Managing employee benefits.
D) Overseeing mergers and acquisitions.

6. What is the purpose of a corporate annual meeting?

A) To conduct daily business operations.
B) To celebrate the company's success.
C) To announce layoffs.
D) To update shareholders on company performance and elect directors.

7. Which financial statement shows a corporation's financial position at a specific point in time?

A) Statement of retained earnings.
B) Balance sheet.
C) Cash flow statement.
D) Income statement.

8. What is a proxy statement in corporate governance?

A) A document disclosing information for shareholder voting.
B) A financial incentive for executives.
C) A plan for international expansion.
D) A report on environmental sustainability.

9. What is a merger in the context of corporations?

A) Changing a company's legal structure.
B) Selling a company to another corporation.
C) Combining two companies into one.
D) Splitting a company into two separate entities.

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