Which of the following statements about the operation of a corporation is correct?
A)A corporation receives its charter from the federal or a provincial government.
B)A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business.
C)Owners of a corporation have unlimited liability for any claims against their company.
D)A corporation tends to be much easier to set up than a sole proprietorship or partnership.

Question

Quizplus · Accepted Answer

A corporation receives its charter from the federal or a provincial government, which grants it the right to exist as a separate legal entity. B is incorrect because the length of time for a charter can vary by state and some states do not have expiration dates. C is incorrect because owners of a corporation have limited liability, meaning that their personal assets are protected from claims against the company. D is incorrect because corporations can be more complicated to set up and require more legal and regulatory steps than sole proprietorships or partnerships.

Which of the Following Statements About the Operation of a Corporation