1. which of the following is an s corporation permitted to do?

a. have an unlimited number of shareholders

b. own subsidiaries

c. pay fica taxes on salaries only

d. issue multiple forms of stock

2. s corporations are most appropriate for entrepreneurs who prefer which of the following?

a. to sell unlimited stock to raise money for the business

b. to choose whether or not to use the double taxation method

c. to have international shareholders

d. to be taxed as if they were sole proprietors or partners

3. after a c corporation is formed, what must happen for it to become an s corporation?

a. the company must reach a specific earnings level

b. the company must elect a special tax status with the irs

c. the company must be certified as a financial institution

d. the company must choose a board of directors and give all decision-making powers to a president

4. limited liability corporations can not do which of the following?

a. utilize the benefits of stock ownership and sales

b. determine if the members want to manage themselves or have a manager with authority over them

c. have foreign investors

d. choose whether or not to use the double taxation method

5. which of the following accurately describes double taxation?

a. corporate income taxes are paid at the federal and state levels

b. corporate income taxes are paid on profits and on stockholders’ personal income on dividends

c. corporate income taxes are paid for an amount which is double the company’s profits

d. corporate income taxes are paid twice each year