Question

. Cash profit sharing plans and stock bonus plans have similarities and differences. Which of the following statements is/are true regarding these plans?

1. Both plans allow participants to vote their shares held by the plan.

2. Both plans can hold employer stock.

a. 1 only

b. 2 only

c. Both 1 and 2

d. Neither 1 nor 2

Answer 1

answer is d
as
1) for cash profit sharing -No voting requirements.
for bonus plan - Plan participants must be able to direct the trustee as to the voting of the shares on a limited number of issues, most significantly the sale of all or substantially all the assets of the employer.
hence statment 1 is not true
2) for cash profit sharing - Cannot borrow money from the company or using its credit to buy employer stock.
for Bonus plan - Cannot borrow money from the company or using its credit to buy employer stock
hence statement 2 is wrong
thus nigher 1 nor 2 is true