Question

Of the following statements, which are true for the corporate form of organization? (Select all that apply.)a. Owners have limited liability for corporate debts. b. It has an unlimited life. c. Directors oversee its business affairs. d. Ownership is usually transferred readily. e. Compared to other forms of organization- capital (financing) is more difficult to accumulate. f. Generally there is no double taxation on corporate income that is distributed to owners. g. It is not a separate legal entity from its owners.

Answer 1

Answer: Option A , B , C , D ,

Explanation:

A. As from the perspective of corporate law, the owners and company are two different entities thus the company itself is liable for its debt. Hence, It is true.

B. The basic characteristic of a corporate entity is that it has perpetual existence, thus, it has a continuous life. Hence, It is true.

C. Usually a corporate entity has one director for all of its major operations to control business activities of  that department. Hence, It is true.

D. The ownership rights of corporate entities trade in share market in form of common stocks and can be sold or purchased easily. Hence, it is true.