Which of the following statements is true of a corporation?(1 point)

Question

Responses

A corporation is closely held if it sells its stock to the general public.
A corporation is closely held if it sells its stock to the general public.

A corporation receives a certificate of incorporation from the state government.
A corporation receives a certificate of incorporation from the state government.

A corporation can last only as long as its directors are alive.
A corporation can last only as long as its directors are alive.

A corporation can buy stock in the company to raise capital.

Answer 1

The true statement about a corporation is:

A corporation receives a certificate of incorporation from the state government.

This certificate is needed to legally establish a corporation, whereas the other statements are incorrect. A corporation is not considered closely held if it sells its stock to the general public; rather, a closely held corporation typically does not sell its stock to the general public. Additionally, a corporation can continue to exist independently of its directors' lifespans, and while a corporation can issue stock to raise capital, it does not buy its own stock as a primary method of raising capital.