Question

What is a Corporation? Corporations have 5 main characteristics. Identify the characteristic that allows the behavior described below.

1. The corporation makes employment contracts with its employees.
2. Bill sells his ownership in Company X to HyeJin.
3. Bongsoo has big personal debts. Bongsoo owns shares in Company Z. Company Z refuses to pay Bongsoo’s debts.
4. Shareholders select a group of people to set broad targets for company goals and performance
5. Hyunwoo owns 10% of Company T. He gets dividend payments after the company makes a profit.
6. Hyunwoo owns 10% of Company T. He gets to vote on fundamental changes to the company.
7. 587 people own shares in Company R on January 1. 938 people own shares in Company R on December 31.
8. Kwansoo owns shares in Company W. Company W goes bankrupt. Kwansoo refuses to pay the company debts.
9. Company S buys a new computer system.
10. Company T is a closed corporation.
11. Company D is an open corporation.
12. Shareholders of Company U elect its board.
13. Company U goes bankrupt. It does not have enough money to pay its employees.   Jerry is a shareholder of Company U. Jerry refused to pay employee salaries.
14. Eunbi buys newly created shares in in Company V.
15. Company P is an unlisted company.
16. Company B is a closely held corporation.
17. Perry benefits from owner shielding.
18. Company E benefits from entity shielding
19. Floria invests in a company but fears losing her personal money in her savings account at the bank. What will protect her?
20. Employees steal from Company K. Company K sues the employees.

Answer 1

A Corporation is a legal entity that is separate and distinct from its owners.A Corporation can function as a separate legal person, they can enter into contracts, they can own assets, they can enter into legal battle, they can lend and borrow money, hire employees and pay taxes.

The 5 main characterisitic of a Corporation is :

1) Limited Liability.
2) Shareholder ownership.
3) Professional management.
4) Double taxation.
5) Continuing lifespan (Goinging concern).

a - Professional Management
b - Shareholder ownership
c - Limited liabilty
d - Shareholder ownership
e - Shareholder ownership
f - Shareholder ownership
g - Shareholder ownership
h - Limited liabilty
i - Professional management
j - Limited liability
k - Shareholder ownership
l - Shareholder ownership
m - Limited liability.
n - Shareholder ownership
o - Limited liability
p - Limited liability
q - Limited liability
r - Limited liability
s - Limited liability
t - Professional Management.