Which of the following statements is NOT true of a corporation?
A)It can incur debt that is an obligation of the corporation but not of its individual owners.
B)It is an entity separate from the individuals who own it.
C)It is legally obliged to distribute all profits to shareholders.
D)It can enter into contracts.
E)It has the right to sue and be sued.

Question

Quizplus · Accepted Answer

A corporation is not necessarily legally obliged to distribute all profits to shareholders. In fact, many corporations choose to retain some profits in order to reinvest in the company or maintain financial stability.

Which of the Following Statements Is NOT True of a Corporation