The term "flow through tax entity" describes...
A form of taxation necessary for Corporations, where they must apply a tax to their sale of stocks and options
Sole proprietorship, where the owner of the business is responsible for all the business’ debt
Neither
A sole proprietorship is a true business entity.
Corporations pay income tax on their profits; shareholders must then...
pay tax again on the dividends received from the corporation aka. Double Taxation.
pay a fee to the corporation for the ownership of stock aka. Double Taxation.
Corporations can have different classes of stock.
Venture capitalists almost always refuse to invest in LLCs preferring corporations instead. Which of the following statements does NOT support this reasoning?
Corporations are easier to merge, sell or take public
Corporations can issue stock options
The general legal uncertainty involving LLCs (in terms of laws and regulations)
Tax issues for LLCs are complex
Once an LLC is established, it does not have as many housekeeping rules as corporations
LLC dissolves upon the withdrawal, death or expulsion of a member whereas Corporations have perpetual existence: they can continue without their founders.
Partnerships are a taxable entity.
Managers in a partnership have a fiduciary duty. Which of the following responses does NOT corresponding to an existing fiduciary duty?
Partners are liable to the partnerships for gross negligence or intentional misconduct
Partners can compete within the partnership
A partner may not take an opportunity away from the partnership unless the other partners consent
If a partner engages in a conflict of interest, he must turn over any profits he earned from that activity to the partnership
Oral agreement is enough to form a legally binding Partnership.
Partnership by implication and Partnership by Estoppel are essentially the same concept.
