Question

4. Two or more corporations owned by five or fewer noncorporate shareholders, who collectively own more than 50% of the stock of each corporation, would best describe which of the following?

a. Brother-sister controlled group

               b. Association

               c. S corporation pending proper election

               d. Parent-subsidiary controlled group

               e. Controlled group

Answer 1

When few people owns more than 50 % of stock of corporation they gets control over the corporations.

Control means holding of more than 50 % of Stock of corporation.

More than 50 % of Holding means such persons have control over decision making of the company. Because their consent is necessary to pass Resolution in the company.

Two or more corporations owned by five or fewer noncorporate shareholders, who collectively own more than 50% of the stock of each corporation is described as Controlled group.

Option e is correct answer.