The major characteristics of a corporation are as follows:

? Separate legal existence ? Limited liability of shareholders ? Transferable ownerships rights ? Ability to acquire capital ? Continuous life ? Government regulations ? Corporate income tax

The following items pertain to one of the characteristics of the corporate form of organization. For each item below, identify:

(a) Whether it represents an advantage or disadvantage, and (b) The characteristic that pertains to the item. (Note: a characteristic can be used more than once.)

1.	A corporation can continue to operate even if all of its shareholders have been replaced
2.	A corporation is a going concern
3.	Buying shares is an attractive way for individuals to invest in a company because the cash requirement is often very small
4.	Corporations issue shares in order to obtain capital (cash)
5.	In private corporations, creditors may demand a personal guarantee from a controlling shareholder
6.	Laws specify the requirements for issuing shares, distributing income to shareholders, and reacquiring shares
7.	No journal entry is required if a shareholder sells his or her shares to another investor
8.	Respecting international, federal, provincial, and securities rules increases costs and complexity for corporations
9.	Shareholders cannot be made to pay for the company's liabilities out of their personal assets
10.	Shareholders may dispose of their interest in a corporation simply by selling their shares
11.	Shareholders only pay income tax on corporation profits when they receive dividends
12.	The corporation acts under its own name
13.	The corporation may buy, own and sell property
14.	The liability of each shareholder is limited to the amount invested in the shares of the corporation
15.	The sale of shares from one individual to another does not affect the corporation assets, liabilities, and total equity

Answer rating: 100% (QA)

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