Which of the following statements is true of a corporation?
A) Corporations pay the same variety of taxes as partnerships.
B) Although a corporation is a separate legal entity, it cannot be sued.
C) Any stockholder of a corporation can commit the corporation to a binding contract.
D) The owners of a corporation are called stockholders.

Question

Quizplus · Accepted Answer

The owners of a corporation are called stockholders. A is incorrect because corporations generally pay more taxes than partnerships. B is incorrect because a corporation can be sued just like any other legal entity. C is incorrect because only certain officers of the corporation, such as the CEO or CFO, have the authority to commit the corporation to a binding contract.

Which of the Following Statements Is True of a Corporation