Paralegal Advanced Competency Exam (PACE) 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 555

What is the primary function of a company as a legal entity?

To manage personal finances of its owners

To provide legal advice to individuals

To pursue set objectives with the right to profits

The primary function of a company as a legal entity is to pursue set objectives with the right to profits. This captures the essence of what a corporation or company is established for – to engage in commercial activities with the goal of generating income for its shareholders or owners. As a legal entity, a company can enter into contracts, sue and be sued, and carry out business activities independently of its owners.

By focusing on profit generation, companies create value not only for themselves but also for their shareholders, employees, and the economy in general. While social causes may be important to some companies, and they may engage in Corporate Social Responsibility (CSR), the intrinsic purpose for the establishment of a business entity centers on profit-making and achieving the objectives set forth in its formation, such as expanding market share, increasing revenues, or launching new products and services.

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To promote social causes for its members

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