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 has the right to sue and be sued.
C) It is an entity separate from the individuals who own it.
D) It is legally obliged to distribute all profits to shareholders.
E) It can enter into contracts.

Question

Quizplus · Accepted Answer

A corporation is not legally obliged to distribute all profits to shareholders, although it may choose to do so. Some corporations choose to retain a portion of their profits for future investments, research and development, or other business purposes.

Which of the Following Statements Is NOT True of a Corporation