Reference no: EM132264888

1. How are the profits of a partnership taxed?

The same as those of corporations

To each partner individually as agreed upon or shared equally among the partners

Not at all, since partnerships are exempt

Both at the partnership level and at the level of individual partners

2. Which of the following would be a legitimate, nondiscriminatory reason for hiring or promoting employees?

Age

Educational level

Color

Race

3. Who establishes executive compensation within a corporation?

The shareholders.

The officers (executives) themselves.

The board of directors.

An independent firm of compensation consultants.

4. What would be a reason for a court to “pierce the corporate veil” and hold corporate shareholders personally liable to a third party?

A corporation did not observe the legal formalities, such as holding monthly board meetings or annual meetings of shareholders.

A corporation was being used as the “alter ego” of one or more shareholders – for example, corporate and personal property was being commingled rather than kept separate.

A corporation was set up as a mere shell and is chronically undercapitalized.

All of the above.

5. In a limited partnership, all partners share management responsibility for the business.

True

False