Question 1

All of the following are true of promoters of a corporation EXCEPT:

Accepted Answer

A)  They solicit investors to begin the corporation.
B)  They prepare the formal documents of incorporation.
C)  They may make contracts in the name of the corporation.
D)  They continue to solicit capital whenever needed after incorporation.

Question 2

Corporations have achieved dominance in which of the following ways?

Accepted Answer

A)  This form of organization accounts for 85 percent of the gross revenues of all business entities.
B)  Over 50 percent of all U.S. businesses are organized in the corporate form.
C)  Over 75 percent of American adults own stock directly or indirectly.
D)  All of the above.

Question 3

Define "promoter" in reference to a corporation.

Accepted Answer

A promoter is a person who brings about ...

Question 4

Name the classifications of corporations.

Accepted Answer

Corporations may be classified...

Question 5

Courts have responded by piercing the veil when the shareholders have:

Accepted Answer

A)  not followed the formalities of corporate procedures.
B)  not provided an adequate financial basis for the business.
C)  used the corporation to defraud.
D)  All of the above.
E)  (a)  and (c)  only.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Under the Statutory Close Corporation Supplement to the MBCA,a close corporation must have bylaws on file with the office of the secretary of state or some other public office.

Accepted Answer

A) True 
 B)False

Question 8

Whether a corporation is a de facto corporation may be challenged by:

Accepted Answer

A)  an individual.
B)  another corporation.
C)  the state in which the business attempted to incorporate.
D)  All of the above.

Question 9

Title to corporate property belongs to the shareholders.

Accepted Answer

A) True 
 B)False

Question 10

Identify and give the basic characteristics of each of the following specialized types of corporations.
a.Professional corporations
b.Public corporations
c.Nonprofit corporations

Accepted Answer

a.Used by doctors,dentists,lawyers,accou...

Question 11

Which of the following is not a requirement of a Subchapter S corporation?

Accepted Answer

A)  It must be a domestic corporation.
B)  It must have no more than 50 shareholders.
C)  A corporation or partnership cannot be a shareholder.
D)  It may have only one class of stock.

Question 12

What is a Subchapter S Corporation,and what are its requirements?

Accepted Answer

Subchapter S of the Internal Revenue Cod...

Question 13

"Piercing the corporate veil" will result in personal liability of shareholders.

Accepted Answer

A) True 
 B)False

Question 14

What powers does a corporation normally possess?

Accepted Answer

The general powers granted by incorporat...

Question 15

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 16

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 17

The possible consequences of a defective incorporation include which of the following?

Accepted Answer

A)  The state may bring an action against the association for involuntary dissolution.
B)  A third party may assert that it is not liable to the association.
C)  The associates are held personally liable to a third party.
D)  All of the above.
E)  None of the above.

Question 18

The Model Business Corporation Act is a state statute that,like the UCC,has been adopted by all of the states in the United States to make state incorporation statutes uniform throughout the United States.

Accepted Answer

A) True 
 B)False

Question 19

The president of Hi-Glow Cosmetics sends his top chemist to Hi-Glow's competitor's labs to steal its formula for shiny lipstick.The chemist gets caught and is sent to jail.Can Hi-Glow be found to be criminally liable?

Accepted Answer

A)  Yes, under the doctrine of ultra vires.
B)  Yes, since the president authorized the crime.
C)  No, because a corporation cannot go to jail.
D)  Both (a)  and (b) .

Question 20

A corporation owned by one person is treated under the law as separate from that person.

Accepted Answer

A) True 
 B)False

Exam 33: Nature and Formation of Corporations

Courts have responded by piercing the veil when the shareholders have:

Correct AnswerverifiedShow Answer

Identify and give the basic characteristics of each of the following specialized types of corporations. a.Professional corporations b.Public corporations c.Nonprofit corporations

Correct Answerverifieda.Used by doctors,dentists,lawyers,accou...View AnswerShow Answer

The president of Hi-Glow Cosmetics sends his top chemist to Hi-Glow's competitor's labs to steal its formula for shiny lipstick.The chemist gets caught and is sent to jail.Can Hi-Glow be found to be criminally liable?

Correct AnswerverifiedShow Answer

The possible consequences of a defective incorporation include which of the following?

Correct AnswerverifiedShow Answer

Whether a corporation is a de facto corporation may be challenged by:

Correct AnswerverifiedShow Answer

What powers does a corporation normally possess?

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

The Model Business Corporation Act is a state statute that,like the UCC,has been adopted by all of the states in the United States to make state incorporation statutes uniform throughout the United States.

Correct AnswerverifiedShow Answer

Title to corporate property belongs to the shareholders.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A corporation owned by one person is treated under the law as separate from that person.

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

Name the classifications of corporations.

Correct AnswerverifiedCorporations may be classified...View AnswerShow Answer

"Piercing the corporate veil" will result in personal liability of shareholders.

Correct AnswerverifiedShow Answer

Under the Statutory Close Corporation Supplement to the MBCA,a close corporation must have bylaws on file with the office of the secretary of state or some other public office.

Correct AnswerverifiedShow Answer

Define "promoter" in reference to a corporation.

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

What is a Subchapter S Corporation,and what are its requirements?

Correct AnswerverifiedSubchapter S of the Internal Revenue Cod...View AnswerShow Answer

Which of the following is not a requirement of a Subchapter S corporation?

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

Corporations have achieved dominance in which of the following ways?

Correct AnswerverifiedShow Answer

All of the following are true of promoters of a corporation EXCEPT:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
a.Used by doctors,dentists,lawyers,accou...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The general powers granted by incorporat...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Ultra vires acts are without legal autho...
View Answer

Correct Answer
verified
Corporations may be classified...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A promoter is a person who brings about ...
View Answer

Correct Answer
verified
Subchapter S of the Internal Revenue Cod...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified