QuestionJuly 20, 2025

What is NOT true about a characteristic of a corporation? Corporations are a separate legal entity Corporations have double taxation with dividends Stockholders are personally liable for all of the debt of a corporation Corporations have an indefinite life assuming they are a going concern

What is NOT true about a characteristic of a corporation? Corporations are a separate legal entity Corporations have double taxation with dividends Stockholders are personally liable for all of the debt of a corporation Corporations have an indefinite life assuming they are a going concern
What is NOT true about a characteristic of a corporation?
Corporations are a separate legal entity
Corporations have double taxation with dividends
Stockholders are personally liable for all of the debt of a corporation
Corporations have an indefinite life assuming they are a going concern

Solution
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Answer

Stockholders are personally liable for all of the debt of a corporation Explanation 1. Identify the incorrect statement Evaluate each characteristic of a corporation to determine which one is false. - **Corporations are a separate legal entity**: True. Corporations are recognized as separate from their owners. - **Corporations have double taxation with dividends**: True. Corporations pay taxes on profits, and shareholders pay taxes on dividends. - **Stockholders are personally liable for all of the debt of a corporation**: False. Stockholders have limited liability and are not personally responsible for corporate debts. - **Corporations have an indefinite life assuming they are a going concern**: True. Corporations can exist indefinitely unless dissolved.

Explanation

1. Identify the incorrect statement<br /> Evaluate each characteristic of a corporation to determine which one is false.<br /><br />- **Corporations are a separate legal entity**: True. Corporations are recognized as separate from their owners.<br />- **Corporations have double taxation with dividends**: True. Corporations pay taxes on profits, and shareholders pay taxes on dividends.<br />- **Stockholders are personally liable for all of the debt of a corporation**: False. Stockholders have limited liability and are not personally responsible for corporate debts.<br />- **Corporations have an indefinite life assuming they are a going concern**: True. Corporations can exist indefinitely unless dissolved.
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