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

2. Who owns a corporation?

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

3. What is a publicly traded corporation?

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

4. How are dividends distributed to shareholders taxed?

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

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

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

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

A) To celebrate the company's success.
B) To conduct daily business operations.
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) Income statement.
D) Cash flow statement.

8. What is a proxy statement in corporate governance?

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

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

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

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