Which of the following statements is true of a corporation?
A)Corporations pay the same variety of taxes as other forms of business.
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. Option A is incorrect because corporations have to pay different types of taxes, such as income tax, employment tax, and excise tax. Option B is incorrect because a corporation can be sued as a separate legal entity. Option C is incorrect because only the board of directors or authorized personnel can commit a corporation to a binding contract, not any stockholder.

Which of the Following Statements Is True of a Corporation