TRUE-FALSE STATEMENTS
1. A corporation is not an entity which is separate and distinct from its owners.
2. A corporation can be organized for the purpose of making a profit or it may be not-for-profit.
3. A corporation acts under its own name rather than in the name of its shareholders.
4. If a corporation pays taxes on its income, then shareholders will not have to pay taxes on the dividends received from that corporation.
5. In the United States, a corporation must be incorporated in each state in which it does business.
6. A shareholder of ordinary shares has the right to vote in the election of the board of directors.
7. A proxy is a legal document that instructs a shareholder’s agent how to vote shares for the shareholder.
8. As soon as a corporation is authorized to issue shares, an accounting journal entry should be made recording the total value of the shares authorized.
9. The par value of ordinary shares must always be equal to its fair value on the date the shares are issued.
10. When no-par value shares do not have a stated value, the entire proceeds from the issuance of the shares becomes legal capital.