Multiple Choice
The form of business ownership best suited to raising large amounts of money for expansion is the:
31
views
1. Introduction to Accounting
Business Organization
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
A corporation is formally formed with which of the following?
A
A business license issued by the city
B
A partnership agreement signed by all owners
C
Articles of Incorporation filed with the state
D
A memorandum of understanding between shareholders
Verified step by step guidance1
Understand the concept of a corporation: A corporation is a legal entity that is separate from its owners and is formed under state law.
Learn the formal process of forming a corporation: The key document required to legally establish a corporation is the Articles of Incorporation, which must be filed with the state government.
Clarify why other options are incorrect: A business license issued by the city is necessary for operating a business but does not establish a corporation. A partnership agreement is used for forming partnerships, not corporations. A memorandum of understanding is an informal agreement and does not have legal standing to form a corporation.
Recognize the importance of Articles of Incorporation: This document includes essential information such as the corporation's name, purpose, structure, and details about its shares and directors.
Conclude that the correct answer is 'Articles of Incorporation filed with the state,' as this is the formal requirement for forming a corporation.
Related Videos
Related Practice
Business Organization practice set
Problem sets built by lead tutorsExpert video explanations