1569340
Description
Quiz by alexandraj0, updated more than 1 year ago
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Created by alexandraj0
over 9 years ago
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Question 1
Question
The term "flow through tax entity" describes...
Answer
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A form of taxation necessary for Corporations, where they must apply a tax to their sale of stocks and options
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Sole proprietorship, where the owner of the business is responsible for all the business’ debt
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Neither
Question 2
Question
A sole proprietorship is a true business entity.
Answer
- True
- False
Question 3
Question
Corporations pay income tax on their profits; shareholders must then...
Answer
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pay tax again on the dividends received from the corporation aka. Double Taxation.
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pay a fee to the corporation for the ownership of stock aka. Double Taxation.
Question 4
Question
Corporations can have different classes of stock.
Answer
- True
- False
Question 5
Question
Venture capitalists almost always refuse to invest in LLCs preferring corporations instead. Which of the following statements does NOT support this reasoning?
Answer
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Corporations are easier to merge, sell or take public
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Corporations can issue stock options
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The general legal uncertainty involving LLCs (in terms of laws and regulations)
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Tax issues for LLCs are complex
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Once an LLC is established, it does not have as many housekeeping rules as corporations
Question 6
Question
LLC dissolves upon the withdrawal, death or expulsion of a member whereas Corporations have perpetual existence: they can continue without their founders.
Answer
- True
- False
Question 7
Question
Partnerships are a taxable entity.
Answer
- True
- False
Question 8
Question
Managers in a partnership have a fiduciary duty. Which of the following responses does NOT corresponding to an existing fiduciary duty?
Answer
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Partners are liable to the partnerships for gross negligence or intentional misconduct
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Partners can compete within the partnership
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A partner may not take an opportunity away from the partnership unless the other partners consent
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If a partner engages in a conflict of interest, he must turn over any profits he earned from that activity to the partnership
Question 9
Question
Oral agreement is enough to form a legally binding Partnership.
Answer
- True
- False
Question 10
Question
Partnership by implication and Partnership by Estoppel are essentially the same concept.
Answer
- True
- False
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