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

2. Who owns a corporation?

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

3. What is a publicly traded corporation?

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

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

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

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

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

6. How are dividends distributed to shareholders taxed?

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

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

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

8. What is a proxy statement in corporate governance?

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

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

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

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