Question

4 — businesses and organizations
learning objective: determine the basic structure and tax forms of legal entities.
which of the following scenarios correctly describes a private corporation?
a.) craig’s sporting goods store does not allow investors to purchase or publicly trade shares.
b.) lashonda and her company are treated the same from a legal perspective.
c.) brian’s company does not pay taxes, but it reinvests income to meet its objectives.
d.) jessica is liable for the total $10,000 invested in her company, but she is not accountable for her partner’s behavior.

Explanation:

A private corporation is a legal entity where shares are not publicly traded or available for purchase by general investors. Option b describes a sole proprietorship (no separate legal identity). Option c describes a non-profit organization. Option d describes a limited partnership. Only option a matches the definition of a private corporation.

Answer:

a.) Craig's sporting goods store does not allow investors to purchase or publicly trade shares.