Question

Aiconnect corporation is a company that has 250 stockholders. although owned by such a large number of stockholders, the major decisions of the company are taken by the 12-member board of directors. the board has enormous authority over the company, and the company functions according to the decisions of the board. based on the given information, the company has .

a.Diagram the current-year corporate reorganization.
b.Identify the tax issues in the proposed transaction
c. a high degree of centralization.

Answer 1

Based on the given information, the company has a high degree of centralization.

What is centralization?

Centralization means that a small group or one person makes most of the decisions. Aiconnect Corporation has 250 owners, but 12 people make the big decisions. The board has a lot of power in the company, and the company follows the decisions made by the board.

This means that a small group of people makes most of the important decisions, showing that power is concentrated in a few hands. The board has a lot of power and control over how the company works and where it's going. The stockholders don't have much say in making decisions.