Which of the following is a characteristic of a corporation?
A) Corporations are separate taxable entities.
B) Lenders of a corporation do not have the right to claim the corporation's assets to satisfy their obligations.
C) Corporations are subjected to less governmental regulation than other forms of businesses.
D) Each stockholder has the authority to commit the corporation to a binding contract through his/her actions.

Question

Quizplus · Accepted Answer

Corporations are separate taxable entities, which means that they are taxed on their own income, separate from their owners. This is a key characteristic of a corporation that distinguishes it from other forms of business organization.

Option B is incorrect because lenders of a corporation do have the right to claim the corporation's assets to satisfy their obligations, subject to the terms of the loan agreement.

Option C is incorrect because corporations are usually subject to a greater degree of governmental regulation than other forms of businesses due to their size, complexity, and potential impact on the economy.

Option D is incorrect because the actions of individual stockholders do not bind the corporation, unless those actions have been authorized by the board of directors or are within the scope of the stockholder's authority as an agent of the corporation.

Which of the Following Is a Characteristic of a Corporation