Which of the following statements is true of a statutory close corporation?
A) It can have an unlimited number of stockholders.
B) It cannot operate under simpler arrangements unlike conventional corporations.
C) Its stockholders rights have unlimited liability.
D) Its owners can actively participate in management while still having limited liability.

Question

Quizplus · Accepted Answer

A statutory close corporation is a type of corporation that operates under simpler arrangements and is generally owned by a small group of individuals. Unlike a conventional corporation, a statutory close corporation allows its owners to actively participate in management while still having limited liability. Therefore, statement D is true. Statement A is incorrect because a statutory close corporation has limited stockholders, often restricted to family members or a select group. Statement B is incorrect because a statutory close corporation operates under simpler arrangements, such as fewer formalities in corporate governance. Statement C is incorrect because stockholders in a statutory close corporation have limited liability.

Which of the Following Statements Is True of a Statutory