Question 1

What is the doctrine of ultra vires ? What is the effect of an ultra vires contract?

Accepted Answer

Ultra vires acts are without legal autho...

Question 2

A corporation is considered to be a person within the meaning of the Fifth Amendment protection against self-incrimination.

Accepted Answer

A) True 
 B)False

Question 3

What powers does a corporation normally possess?

Accepted Answer

The general powers granted by incorporat...

Question 4

Opal, a promoter of Victory Corporation, has a fiduciary duty to:

Accepted Answer

A)   any other promoters of Victory Corporation.
B)   only Victory Corporation.
C)   the initial shareholders of Victory Corporation.
D)   A ny other promoters of Victory Corporation and also  the initial shareholders of Victory Corporation.

Question 5

The Revised Act authorizes shareholders in closely held corporations to adopt shareholder agreements that depart from statutory norms by altering the governance of the corporation. These agreements:

Accepted Answer

A)   are effective if adopted by a majority of the shareholders.
B)   are valid for the life of the corporation unless a new agreement is reached.
C)   are binding on shareholders, the state, creditors, and other third parties.
D)   terminate automatically if the corporation's shares are traded publicly.

Question 6

Bill Bonney, the sole stockholder of Kidd Corporation, wrongfully used the corporation to avoid a personal liability. A court order that disregards the corporate entity and holds Bonney personally liable is called:

Accepted Answer

A)   limited liability.
B)   ultra vires.
C)   diversity of interest.
D)   piercing the corporate veil.

Question 7

Subchapter S is a section of the Model Business Corporation Act that provides special benefits for small corporations.

Accepted Answer

A) True 
 B)False

Question 8

A corporation is considered a citizen:

Accepted Answer

A)   of the state in which it has its principal office, for the purpose of determining diversity of citizenship.
B)   of the state of its incorporation, for the purpose of determining diversity of citizenship.
C)   in both of these situations.
D)   in neither of these situations.

Question 9

Define "promoter" in reference to a corporation.

Accepted Answer

A promoter is a person who brings about ...

Question 10

A promoter is a person who takes the preliminary steps to organize a corporation.

Accepted Answer

A) True 
 B)False

Question 11

Snazzy Sneakers Co. sues SureFast Glue Corporation for breach of contract for $2,400 of shoe glue that was not delivered according to their agreement. SureFast may assert as a defense to payment that Snazzy Sneakers is not a de jure corporation.

Accepted Answer

A) True 
 B)False

Question 12

If incorporated, the City of Chicago would best be described as which of the following?

Accepted Answer

A)   A corporation formed pursuant to the Model Business Corporation Act.
B)   A close corporation.
C)   A public corporation.
D)   A domestic corporation.

Question 13

The Revised Act provides that at least two persons need to act as incorporators, though more may do so.

Accepted Answer

A) True 
 B)False

Question 14

What are the consequences of a defective incorporation?

Accepted Answer

The possible consequences of a defective...

Question 15

A corporation owned by a single person is treated under the law as the same entity as that person.

Accepted Answer

A) True 
 B)False

Question 16

The modern approach follows the common law rule in holding that a corporation cannot commit a criminal act.

Accepted Answer

A) True 
 B)False

Question 17

Under the RMBCA, the bylaws may be amended and must be publicly filed with the articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 18

Shareholders do not have limited liability for corporate debts.

Accepted Answer

A) True 
 B)False

Question 19

Norez Corporation is incorporated in the state of Nevada. It now wants to open a retail outlet in Utah. Norez must obtain a certificate qualifying it to do business in the state of Utah .

Accepted Answer

A) True 
 B)False

Question 20

The RMBCA has been adopted, in whole or in part, by most states.

Accepted Answer

A) True 
 B)False

Exam 33: Nature and Formation of Corporations

The RMBCA has been adopted, in whole or in part, by most states.

Correct AnswerverifiedShow Answer

The Revised Act provides that at least two persons need to act as incorporators, though more may do so.

Correct AnswerverifiedShow Answer

What powers does a corporation normally possess?

Correct AnswerverifiedThe general powers granted by incorporat...View AnswerShow Answer

A promoter is a person who takes the preliminary steps to organize a corporation.

Correct AnswerverifiedShow Answer

If incorporated, the City of Chicago would best be described as which of the following?

Correct AnswerverifiedShow Answer

Define "promoter" in reference to a corporation.

Correct AnswerverifiedA promoter is a person who brings about ...View AnswerShow Answer

The Revised Act authorizes shareholders in closely held corporations to adopt shareholder agreements that depart from statutory norms by altering the governance of the corporation. These agreements:

Correct AnswerverifiedShow Answer

A corporation is considered to be a person within the meaning of the Fifth Amendment protection against self-incrimination.

Correct AnswerverifiedShow Answer

Bill Bonney, the sole stockholder of Kidd Corporation, wrongfully used the corporation to avoid a personal liability. A court order that disregards the corporate entity and holds Bonney personally liable is called:

Correct AnswerverifiedShow Answer

Norez Corporation is incorporated in the state of Nevada. It now wants to open a retail outlet in Utah. Norez must obtain a certificate qualifying it to do business in the state of Utah .

Correct AnswerverifiedShow Answer

What is the doctrine of ultra vires ? What is the effect of an ultra vires contract?

Correct AnswerverifiedUltra vires acts are without legal autho...View AnswerShow Answer

Shareholders do not have limited liability for corporate debts.

Correct AnswerverifiedShow Answer

The modern approach follows the common law rule in holding that a corporation cannot commit a criminal act.

Correct AnswerverifiedShow Answer

Under the RMBCA, the bylaws may be amended and must be publicly filed with the articles of incorporation.

Correct AnswerverifiedShow Answer

Opal, a promoter of Victory Corporation, has a fiduciary duty to:

Correct AnswerverifiedShow Answer

A corporation is considered a citizen:

Correct AnswerverifiedShow Answer

Snazzy Sneakers Co. sues SureFast Glue Corporation for breach of contract for $2,400 of shoe glue that was not delivered according to their agreement. SureFast may assert as a defense to payment that Snazzy Sneakers is not a de jure corporation.

Correct AnswerverifiedShow Answer

Subchapter S is a section of the Model Business Corporation Act that provides special benefits for small corporations.

Correct AnswerverifiedShow Answer

A corporation owned by a single person is treated under the law as the same entity as that person.

Correct AnswerverifiedShow Answer

What are the consequences of a defective incorporation?

Correct AnswerverifiedThe possible consequences of a defective...View AnswerShow Answer

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The general powers granted by incorporat...
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A promoter is a person who brings about ...
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Ultra vires acts are without legal autho...
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The possible consequences of a defective...
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