Question 1

A nonprofit corporation may make a profit,but it may not be distributed to members,directors,or officers.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

A promoter is personally liable on contracts made by him in the name of the unformed corporation:

Accepted Answer

A)  even if the corporation adopts the contract. 
B)  only until the corporation is formed. 
C)  if the promoter,the third party,and the corporation enter into a novation substituting the corporation for the promoter. 
D)  only if the corporation is never formed. 
A)  even if the corporation adopts the contract. 
B)  only until the corporation is formed. 
C)  if the promoter,the third party,and the corporation enter into a novation substituting the corporation for the promoter. 
D)  only if the corporation is never formed.

Question 4

The bylaws of the corporation:

Accepted Answer

A)  are adopted as one of the first items of business at the organizational meeting held promptly after incorporation. 
B)  may contain any provision for managing the business not inconsistent with law or the charter. 
C)  may be repealed by the board of directors. 
D)  All of these are true. 
A)  are adopted as one of the first items of business at the organizational meeting held promptly after incorporation. 
B)  may contain any provision for managing the business not inconsistent with law or the charter. 
C)  may be repealed by the board of directors. 
D)  All of these are true.

Question 5

Under the RMBCA,the articles of incorporation must include all EXCEPT which one of the following?

Accepted Answer

A)  The number of authorized shares 
B)  The name of the registered agent 
C)  The names of the initial shareholders 
D)  The address of each incorporator 
A)  The number of authorized shares 
B)  The name of the registered agent 
C)  The names of the initial shareholders 
D)  The address of each incorporator

Question 6

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 theory of ultra vires 
B)  Yes,since the president authorized the crime 
C)  No,because a corporation acts through the board of directors 
D)  No,because a corporation can't go to jail 
A)  Yes,under the theory of ultra vires 
B)  Yes,since the president authorized the crime 
C)  No,because a corporation acts through the board of directors 
D)  No,because a corporation can't go to jail

Question 7

What is the definition of a Subchapter S Corporation?

Accepted Answer

Subchapter S of the Internal Revenue Cod

Question 8

Which of the following is correct regarding a foreign corporation?

Accepted Answer

A)  A foreign corporation is incorporated in a foreign country. 
B)  A foreign corporation may not do business,except for acts in interstate commerce,in any state other than the state of its incorporation. 
C)  Doing or transacting business within a particular state makes a foreign corporation subject to local litigation,regulation,and taxation. 
D)  All of these are correct. 
A)  A foreign corporation is incorporated in a foreign country. 
B)  A foreign corporation may not do business,except for acts in interstate commerce,in any state other than the state of its incorporation. 
C)  Doing or transacting business within a particular state makes a foreign corporation subject to local litigation,regulation,and taxation. 
D)  All of these are correct.

Question 9

A corporation whose principal place of business operation is Florida must be incorporated in Florida.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A corporation must keep its funds separate from those of its shareholders.

Accepted Answer

A) True 
 B)False

Question 12

Under the RMBCA,a pre-incorporation subscription may be revoked at any time without the consent of the subscribers.

Accepted Answer

A) True 
 B)False

Question 13

Name the classifications of corporations.

Accepted Answer

Corporations may be classified as public

Question 14

If a foreign corporation wishes to avoid transacting business in Arkansas,it would be careful NOT to do which of the following?

Accepted Answer

A)  Own a piece of real estate in Arkansas on which it may build in the future 
B)  Own a building in Arkansas in which to warehouse stock 
C)  Maintain a bank account in Arkansas 
D)  Allowing its product to be transported on Arkansas state highways on the way to another state. 
A)  Own a piece of real estate in Arkansas on which it may build in the future 
B)  Own a building in Arkansas in which to warehouse stock 
C)  Maintain a bank account in Arkansas 
D)  Allowing its product to be transported on Arkansas state highways on the way to another state.

Question 15

Under which of the following provisions of the U.S.Constitution is a corporation not a "person"?

Accepted Answer

A)  The Fifth Amendment's Due Process Clause 
B)  The Fourteenth Amendment's Due Process Clause 
C)  The Fourteenth Amendment's Equal Protection Clause 
D)  The Fifth Amendment's clause protecting against self-incrimination 
A)  The Fifth Amendment's Due Process Clause 
B)  The Fourteenth Amendment's Due Process Clause 
C)  The Fourteenth Amendment's Equal Protection Clause 
D)  The Fifth Amendment's clause protecting against self-incrimination

Question 16

Which of the following is not true of promoters of a corporation?

Accepted Answer

A)  They arrange for capital and financing to start a corporation. 
B)  They assemble the necessary assets to start a corporation. 
C)  They attend to the actual legal formation of a corporation. 
D)  They continue to solicit capital whenever needed after incorporation. 
A)  They arrange for capital and financing to start a corporation. 
B)  They assemble the necessary assets to start a corporation. 
C)  They attend to the actual legal formation of a corporation. 
D)  They continue to solicit capital whenever needed after incorporation.

Question 17

The Model Business Corporation Act provides for small,closely held corporations to be organized and creates Subchapter S corporations with special benefits.

Accepted Answer

A) True 
 B)False

Question 18

A corporation has perpetual existence unless otherwise stated in its articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 19

Under the RMBCA,the filing of the articles of incorporation by the Secretary of State is conclusive proof that the incorporators have satisfied all conditions precedent to incorporation so that a shareholder or creditor would be unable to challenge the existence of the corporation.

Accepted Answer

A) True 
 B)False

Question 20

Shareholders do not have limited liability for corporate debts.

Accepted Answer

A) True 
 B)False

Exam 33: Nature,formation,and Powers

A nonprofit corporation may make a profit,but it may not be distributed to members,directors,or officers.

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

A promoter is personally liable on contracts made by him in the name of the unformed corporation:

The bylaws of the corporation:

Under the RMBCA,the articles of incorporation must include all EXCEPT which one of the following?

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?

What is the definition of a Subchapter S Corporation?

Which of the following is correct regarding a foreign corporation?

A corporation whose principal place of business operation is Florida must be incorporated in Florida.

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

A corporation must keep its funds separate from those of its shareholders.

Under the RMBCA,a pre-incorporation subscription may be revoked at any time without the consent of the subscribers.

Name the classifications of corporations.

If a foreign corporation wishes to avoid transacting business in Arkansas,it would be careful NOT to do which of the following?

Under which of the following provisions of the U.S.Constitution is a corporation not a "person"?

Which of the following is not true of promoters of a corporation?

The Model Business Corporation Act provides for small,closely held corporations to be organized and creates Subchapter S corporations with special benefits.

A corporation has perpetual existence unless otherwise stated in its articles of incorporation.

Under the RMBCA,the filing of the articles of incorporation by the Secretary of State is conclusive proof that the incorporators have satisfied all conditions precedent to incorporation so that a shareholder or creditor would be unable to challenge the existence of the corporation.

Shareholders do not have limited liability for corporate debts.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms