Chapter 11, Problem 3Q

(a)

To determine

Corporation: A business concern where there is a separate legal entity, and are owned by shareholders, are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. The liabilities of the stockholders to its creditors is limited up to their invested capital amount in the corporation.

To explain: the terms, ‘charter, by-laws, and organization costs’.

(b)

To determine

To explain: whether Mr. D’s statement,’ ‘a corporation must be incorporated in the state in which its headquarters office is located’ is correct.