Question 1

The ultra vires doctrine applies in most provinces in Canada.

Accepted Answer

A) True 
 B)False

Question 2

Albert is employed by a large company that manufactures aluminum siding.The company allows Albert to use its truck for deliveries and also for his personal use.The truck has the name of the company on it.One evening after the company has closed for business,Albert causes an accident while driving the truck and damages the car of a third party.In this situation,

Accepted Answer

A) Albert is personally responsible for the damages of the third party and the company has no liability. 
B) the company alone is vicariously liable to the third party for the damages. 
C) both Albert and the company are liable for the third party's damages. 
D) Albert alone as an employee of the company is responsible for the third party's damages. 
E) none of the above 
A) Albert is personally responsible for the damages of the third party and the company has no liability. 
B) the company alone is vicariously liable to the third party for the damages. 
C) both Albert and the company are liable for the third party's damages. 
D) Albert alone as an employee of the company is responsible for the third party's damages. 
E) none of the above

Question 3

Leaving aside certain mandatory requirements for federal corporations,what is the main consideration in deciding whether to incorporate federally or provincially?

Accepted Answer

Generally speaking,the main co

Question 4

The doctrine of ultra vires,as applied to corporations,has now been abolished throughout Canada.This means that Canadian corporations

Accepted Answer

A) do not have the capacity and all the rights,powers,and privileges of a natural person. 
B) can only act through the authority vested in their agents. 
C) cannot be held to contracts entered into that are outside of their charter. 
D) cannot act beyond their constitutional powers. 
E) have broadened powers and capacity to contract. 
A) do not have the capacity and all the rights,powers,and privileges of a natural person. 
B) can only act through the authority vested in their agents. 
C) cannot be held to contracts entered into that are outside of their charter. 
D) cannot act beyond their constitutional powers. 
E) have broadened powers and capacity to contract.

Question 5

Luzzos Corp.is a closely held corporation where "The right to transfer shares needs to be restricted in some manner." This is most likely to be done by

Accepted Answer

A) required consent of the board of directors. 
B) placing the restriction outside the corporate charter. 
C) giving the right of first refusal to the existing shareholders. 
D) placing the restriction in a by-law. 
E) giving a large shareholder the right of veto. 
A) required consent of the board of directors. 
B) placing the restriction outside the corporate charter. 
C) giving the right of first refusal to the existing shareholders. 
D) placing the restriction in a by-law. 
E) giving a large shareholder the right of veto.

Question 6

In rare circumstances,courts are prepared to disregard the separate existence of a corporation and "lift the veil" to impose liabilities on those who control it.Which of the following is NOT one of the conditions that must be met for the court to impose liability on an individual?

Accepted Answer

A) The individual must control the corporation. 
B) The individual must be a shareholder of the corporation. 
C) The individual exercises the control of the corporation to commit a fraud,a wrong,or a breach of duty. 
D) The misconduct must be the cause of the plaintiff's injury. 
A) The individual must control the corporation. 
B) The individual must be a shareholder of the corporation. 
C) The individual exercises the control of the corporation to commit a fraud,a wrong,or a breach of duty. 
D) The misconduct must be the cause of the plaintiff's injury.

Question 7

What is the doctrine of ultra vires in corporate law and what is its current effect across Canada?

Accepted Answer

Ultra vires means "beyond the powers of

Question 8

In both theory and reality,a corporation always protects the liability of its shareholders.

Accepted Answer

A) True 
 B)False

Question 9

John and George wish to incorporate their manufacturing business and intend to manufacture and sell their products throughout Canada.In such a case,they should consider incorporating

Accepted Answer

A) a federal company. 
B) an international company. 
C) a professional corporation. 
D) a private provincial company. 
E) none of the above 
A) a federal company. 
B) an international company. 
C) a professional corporation. 
D) a private provincial company. 
E) none of the above

Question 10

Regarding corporations,which statement follows the principle of limited liability?

Accepted Answer

A) a director who drives dangerously and causes an accident while on company business 
B) shareholders of a small,private company provide security or personal guarantees on loans made to their company 
C) a corporation is liable for its own debts 
D) the trustee in bankruptcy requires shareholders to repay corporate property received prior to bankruptcy 
E) a dividend is paid to a shareholder although the corporation make no profits-the shareholder is liable for the corporation's debt to the extent of the dividend 
A) a director who drives dangerously and causes an accident while on company business 
B) shareholders of a small,private company provide security or personal guarantees on loans made to their company 
C) a corporation is liable for its own debts 
D) the trustee in bankruptcy requires shareholders to repay corporate property received prior to bankruptcy 
E) a dividend is paid to a shareholder although the corporation make no profits-the shareholder is liable for the corporation's debt to the extent of the dividend

Question 11

John,who has a reputation for dishonesty,recently incorporated an investment company to protect himself from liability for his dishonest activities.John makes himself an employee of the company and fraudulently misrepresents an investment to a new customer who invests a large sum of money,which John pockets.A few days later the company goes bankrupt.In this situation,the investor

Accepted Answer

A) can sue John for breach of fiduciary duty. 
B) can move to have the court pierce the corporate veil and sue John directly for fraud. 
C) can sue both the company and John. 
D) can sue only the company. 
E) none of the above 
A) can sue John for breach of fiduciary duty. 
B) can move to have the court pierce the corporate veil and sue John directly for fraud. 
C) can sue both the company and John. 
D) can sue only the company. 
E) none of the above

Question 12

Associated corporations constitute a statutory limitation on the concept of separate corporate identities.In the legal sense,what is an associated corporation?

Accepted Answer

A) corporations that have interlocking directorates 
B) corporations producing the same product type,such as Coca Cola and Pepsi or Apple and IBM 
C) corporations that buy and sell to each other 
D) corporations that sell to the same market 
E) where one corporation controls another or where two or more corporations are controlled by the same person 
A) corporations that have interlocking directorates 
B) corporations producing the same product type,such as Coca Cola and Pepsi or Apple and IBM 
C) corporations that buy and sell to each other 
D) corporations that sell to the same market 
E) where one corporation controls another or where two or more corporations are controlled by the same person

Question 13

Which of the following is included in the articles of incorporation?

Accepted Answer

A) any restrictions on the business that may be carried on other provisions that the incorporators choose to include 
B) if there are two or more classes of shares,the rights and restrictions attached to each 
C) any restrictions on the transfer of shares 
D) name of the corporation 
E) all of the above 
A) any restrictions on the business that may be carried on other provisions that the incorporators choose to include 
B) if there are two or more classes of shares,the rights and restrictions attached to each 
C) any restrictions on the transfer of shares 
D) name of the corporation 
E) all of the above

Question 14

John and Peter wish to incorporate their grocery business as Happy Groceries Ltd.To do so,among other things,they must

Accepted Answer

A) decide on the by-laws of the corporation. 
B) complete articles of incorporation. 
C) obtain a certificate of incorporation. 
D) conduct a name search. 
E) all of the above 
A) decide on the by-laws of the corporation. 
B) complete articles of incorporation. 
C) obtain a certificate of incorporation. 
D) conduct a name search. 
E) all of the above

Question 15

A shareholder who engages in a conflict of interest with a corporation in which the shareholder holds shares must

Accepted Answer

A) pay damages to the corporation. 
B) disgorge any profit the shareholder makes through the conflict of interest. 
C) sell the shareholders shares to the corporation. 
D) get the consent of the corporation in which the shareholders holds shares. 
E) none of the above 
A) pay damages to the corporation. 
B) disgorge any profit the shareholder makes through the conflict of interest. 
C) sell the shareholders shares to the corporation. 
D) get the consent of the corporation in which the shareholders holds shares. 
E) none of the above

Question 16

Bill and Ted decide to set up a small company to invest in real estate.Before incorporating they find a prime piece of real estate that is suitable for investment purposes.They want to buy the property through a limited company but have not as yet incorporated.They attend at a lawyer's office for purposes of filing articles of incorporation.The lawyer asks them what name they plan to use for the corporation.Bill immediately says "Bill and Ted's Excellent Investments Inc.".The lawyer advises them that she will need some time to have the name approved through the appropriate government office.Bill tells the lawyer there is no time to wait for the name approval.In these circumstances Bill and Ted can

Accepted Answer

A) Tell the real estate agent to "hold off" for a couple of days until the name is approved. 
B) Use a "number name" where the registry simply assigns a number to the new corporation and worry about the name change later. 
C) Opt to form a partnership instead. 
D) File a "request to delay name of corporation form" at the time of filing the articles of incorporation. 
E) Hire a new lawyer. 
A) Tell the real estate agent to "hold off" for a couple of days until the name is approved. 
B) Use a "number name" where the registry simply assigns a number to the new corporation and worry about the name change later. 
C) Opt to form a partnership instead. 
D) File a "request to delay name of corporation form" at the time of filing the articles of incorporation. 
E) Hire a new lawyer.

Question 17

Explain the difference between the rights of a shareholder and a bondholder.

Accepted Answer

A corporation can borrow money by issuin

Question 18

A professional corporation is a special type of corporation that may be established by members of a profession.

Accepted Answer

A) True 
 B)False

Question 19

The classic case that established the existence of the corporation as a separate legal entity is

Accepted Answer

A) Hart versus Hart,1868. 
B) The Partners' Cases,a series of small cases in 1903. 
C) Salomon's Case,1897. 
D) The Forms and Processes Case,1902. 
E) all of the above 
A) Hart versus Hart,1868. 
B) The Partners' Cases,a series of small cases in 1903. 
C) Salomon's Case,1897. 
D) The Forms and Processes Case,1902. 
E) all of the above

Question 20

John,Susan,and Terence retain a lawyer to incorporate a company that they expect will be taken public in the future.What basic information should the lawyer give to them concerning the incorporating documents?

Accepted Answer

All companies are initially incorporated

Exam 25: The Nature of a Corporation and Its Formation

The ultra vires doctrine applies in most provinces in Canada.

Leaving aside certain mandatory requirements for federal corporations,what is the main consideration in deciding whether to incorporate federally or provincially?

The doctrine of ultra vires,as applied to corporations,has now been abolished throughout Canada.This means that Canadian corporations

Luzzos Corp.is a closely held corporation where "The right to transfer shares needs to be restricted in some manner." This is most likely to be done by

In rare circumstances,courts are prepared to disregard the separate existence of a corporation and "lift the veil" to impose liabilities on those who control it.Which of the following is NOT one of the conditions that must be met for the court to impose liability on an individual?

What is the doctrine of ultra vires in corporate law and what is its current effect across Canada?

In both theory and reality,a corporation always protects the liability of its shareholders.

John and George wish to incorporate their manufacturing business and intend to manufacture and sell their products throughout Canada.In such a case,they should consider incorporating

Regarding corporations,which statement follows the principle of limited liability?

Associated corporations constitute a statutory limitation on the concept of separate corporate identities.In the legal sense,what is an associated corporation?

Which of the following is included in the articles of incorporation?

John and Peter wish to incorporate their grocery business as Happy Groceries Ltd.To do so,among other things,they must

A shareholder who engages in a conflict of interest with a corporation in which the shareholder holds shares must

Explain the difference between the rights of a shareholder and a bondholder.

A professional corporation is a special type of corporation that may be established by members of a profession.

The classic case that established the existence of the corporation as a separate legal entity is

John,Susan,and Terence retain a lawyer to incorporate a company that they expect will be taken public in the future.What basic information should the lawyer give to them concerning the incorporating documents?

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

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