For a business to be considered a corporation:
A) its stock must be sold in extremely large amounts.
B) it must be organized as a separate legal entity.
C) it must issue both common and preferred stock.
D) it must pay dividends.

Question

Quizplus · Accepted Answer

A corporation is a separate legal entity from its owners, meaning it has its own legal rights and liabilities. This is the defining characteristic of a corporation. The other options (selling large amounts of stock, issuing both common and preferred stock, and paying dividends) are not necessary for a business to be considered a corporation.

For a Business to Be Considered a Corporation