Question 1

In order to be effective,when is shareholder approval needed for an amendment to the articles?

Accepted Answer

A)  for all amendments 
B)  only for amendments that are not filed 
C)  for all amendments that will affect shareholder rights 
D)  only for amendments that the board does not approve 
E)  only for amendments that affect rights to real property 
A)  for all amendments 
B)  only for amendments that are not filed 
C)  for all amendments that will affect shareholder rights 
D)  only for amendments that the board does not approve 
E)  only for amendments that affect rights to real property

Question 2

Which of the following are examples of when the secretary of state can obtain administrative dissolution of a corporation?

Accepted Answer

A)  There are no situations under which the secretary of state can obtain administrative dissolution of a corporation. 
B)  If the corporation failed for thirty days to maintain a registered agent in the state. 
C)  If the corporation failed to pay its franchise fee. 
D)  If the corporation failed to pay its transaction fee. 
E)  If the corporation failed to file a semi-annual report. 
A)  There are no situations under which the secretary of state can obtain administrative dissolution of a corporation. 
B)  If the corporation failed for thirty days to maintain a registered agent in the state. 
C)  If the corporation failed to pay its franchise fee. 
D)  If the corporation failed to pay its transaction fee. 
E)  If the corporation failed to file a semi-annual report.

Question 3

Owners of corporations are called ________.

Accepted Answer

A)  employees 
B)  associates 
C)  shareholders 
D)  directors 
E)  members 
A)  employees 
B)  associates 
C)  shareholders 
D)  directors 
E)  members

Question 4

Shareholders elect the corporate board of directors and vote on fundamental changes in the corporation.

Accepted Answer

A) True 
 B)False

Question 5

Public corporations are formed pursuant to state law.

Accepted Answer

A) True 
 B)False

Question 6

Where a foreign corporation is required to qualify to conduct intrastate commerce in a state,it must obtain a certificate of incorporation from the state.

Accepted Answer

A) True 
 B)False

Question 7

What makes a "publicly-held" corporation different from a "public" corporation?

Accepted Answer

A)  A publicly-held corporation has many shareholders, while a public corporation is a corporation owned by a governmental entity. 
B)  A publicly-held corporation is entitled to limited liability, but a public corporation is not. 
C)  A publicly-held corporation must have a charitable purpose, while a public corporation need not have a charitable purpose. 
D)  A public corporation is entitled to limited liability, but a publicly-held corporation is not. 
E)  Both terms have the same meaning. 
A)  A publicly-held corporation has many shareholders, while a public corporation is a corporation owned by a governmental entity. 
B)  A publicly-held corporation is entitled to limited liability, but a public corporation is not. 
C)  A publicly-held corporation must have a charitable purpose, while a public corporation need not have a charitable purpose. 
D)  A public corporation is entitled to limited liability, but a publicly-held corporation is not. 
E)  Both terms have the same meaning.

Question 8

A ________ is a long-term,unsecured instrument that is based on a corporation's general credit standing.

Accepted Answer

A)  debenture 
B)  bond 
C)  note 
D)  promissory note 
E)  primogeniture 
A)  debenture 
B)  bond 
C)  note 
D)  promissory note 
E)  primogeniture

Question 9

The person empowered by the corporation to receive notice of lawsuits against it is called the:

Accepted Answer

A)  incorporator. 
B)  promoter. 
C)  registered agent. 
D)  president. 
E)  director "du jour." 
A)  incorporator. 
B)  promoter. 
C)  registered agent. 
D)  president. 
E)  director "du jour."

Question 10

A professional corporation is one that:

Accepted Answer

A)  is formed with the assistance of a lawyer. 
B)  has been in existence long enough to reasonably assure that it will be profitable in the near future. 
C)  is typically used as a form of doing business by professionals such as lawyers, accountants, physicians, and dentists. 
D)  does not have shareholders. 
E)  is publicly traded, as required by law. 
A)  is formed with the assistance of a lawyer. 
B)  has been in existence long enough to reasonably assure that it will be profitable in the near future. 
C)  is typically used as a form of doing business by professionals such as lawyers, accountants, physicians, and dentists. 
D)  does not have shareholders. 
E)  is publicly traded, as required by law.

Question 11

Which of the following is true regarding a dissolved corporation?

Accepted Answer

A)  A dissolved corporation does not continue its corporate existence. 
B)  A dissolved corporation may not carry on any business. 
C)  In a voluntary dissolution, liquidation is usually carried out by the secretary of state. 
D)  Termination occurs after the winding-up of the corporation's affairs, the liquidation of its assets, and the distribution of the proceeds to the claimants. 
E)  Termination occurs as soon as assets are liquidated. 
A)  A dissolved corporation does not continue its corporate existence. 
B)  A dissolved corporation may not carry on any business. 
C)  In a voluntary dissolution, liquidation is usually carried out by the secretary of state. 
D)  Termination occurs after the winding-up of the corporation's affairs, the liquidation of its assets, and the distribution of the proceeds to the claimants. 
E)  Termination occurs as soon as assets are liquidated.

Question 12

Roberta wants to start a corporation to perform "pet sitting" services in her town.She is trying to decide on a name for her corporation.How should she go about doing so?

Accepted Answer

In addition to issues involving a name t

Question 13

What is the significance of the term "preferred" in reference to the term "preferred stock?"

Accepted Answer

A)  It is generally considered to be a worse investment than common stock. 
B)  Preferred stockholders usually have greater voting rights than common stockholders. 
C)  In the event of corporate liquidation, holders of common stock are paid before holders of preferred stock. 
D)  In the event of corporate liquidation, preferred stockholders receive certain preferences over common stockholders with respect to dividends or assets. 
E)  Only shareholders owning a certain minimum amount of common stock are entitled to purchase preferred stock. 
A)  It is generally considered to be a worse investment than common stock. 
B)  Preferred stockholders usually have greater voting rights than common stockholders. 
C)  In the event of corporate liquidation, holders of common stock are paid before holders of preferred stock. 
D)  In the event of corporate liquidation, preferred stockholders receive certain preferences over common stockholders with respect to dividends or assets. 
E)  Only shareholders owning a certain minimum amount of common stock are entitled to purchase preferred stock.

Question 14

A small corporation will typically choose the state in which the corporation will be doing most of its business as the state for incorporation.

Accepted Answer

A) True 
 B)False

Question 15

A "closely held," or "close",corporation is a corporation that operates only within its state of incorporation.

Accepted Answer

A) True 
 B)False

Question 16

The corporation's registered agent:

Accepted Answer

A)  must be a director of the corporation. 
B)  must be an officer of the corporation. 
C)  must be an employee, but not an officer of, the corporation. 
D)  is either an individual or a corporation located in the state of incorporation. 
E)  may be any individual or corporation located in the United States. 
A)  must be a director of the corporation. 
B)  must be an officer of the corporation. 
C)  must be an employee, but not an officer of, the corporation. 
D)  is either an individual or a corporation located in the state of incorporation. 
E)  may be any individual or corporation located in the United States.

Question 17

A nonprofit corporation is a:

Accepted Answer

A)  corporation that has never made a profit. 
B)  corporation that does not intend to make a profit. 
C)  corporation formed for charitable, educational, religious or scientific purposes that cannot make a profit. 
D)  corporation formed for charitable, educational, religious or scientific purposes that can make a profit, although any profit generated may not be distributed to its members, officers or directors. 
E)  corporation formed only for charitable purposes. 
A)  corporation that has never made a profit. 
B)  corporation that does not intend to make a profit. 
C)  corporation formed for charitable, educational, religious or scientific purposes that cannot make a profit. 
D)  corporation formed for charitable, educational, religious or scientific purposes that can make a profit, although any profit generated may not be distributed to its members, officers or directors. 
E)  corporation formed only for charitable purposes.

Question 18

A "dividend preference" is the right to receive a fixed dividend at set periods during the year.

Accepted Answer

A) True 
 B)False

Question 19

Debt securities are also called ________ income securities.

Accepted Answer

A)  guaranteed 
B)  par 
C)  variable 
D)  fixed 
E)  passive 
A)  guaranteed 
B)  par 
C)  variable 
D)  fixed 
E)  passive

Question 20

The document filed in order to obtain a corporate charter is called an affirmation of incorporation.

Accepted Answer

A) True 
 B)False

Exam 27: Corporate Formation and Financing

In order to be effective,when is shareholder approval needed for an amendment to the articles?

Which of the following are examples of when the secretary of state can obtain administrative dissolution of a corporation?

Owners of corporations are called ________.

Shareholders elect the corporate board of directors and vote on fundamental changes in the corporation.

Public corporations are formed pursuant to state law.

Where a foreign corporation is required to qualify to conduct intrastate commerce in a state,it must obtain a certificate of incorporation from the state.

What makes a "publicly-held" corporation different from a "public" corporation?

A ________ is a long-term,unsecured instrument that is based on a corporation's general credit standing.

The person empowered by the corporation to receive notice of lawsuits against it is called the:

A professional corporation is one that:

Which of the following is true regarding a dissolved corporation?

Roberta wants to start a corporation to perform "pet sitting" services in her town.She is trying to decide on a name for her corporation.How should she go about doing so?

What is the significance of the term "preferred" in reference to the term "preferred stock?"

A small corporation will typically choose the state in which the corporation will be doing most of its business as the state for incorporation.

A "closely held," or "close",corporation is a corporation that operates only within its state of incorporation.

The corporation's registered agent:

A nonprofit corporation is a:

A "dividend preference" is the right to receive a fixed dividend at set periods during the year.

Debt securities are also called ________ income securities.

The document filed in order to obtain a corporate charter is called an affirmation of incorporation.

Legal Heritage and the Information Age

Constitutional Law for Business and E-Commerce

Courts and Jurisdiction

Judicial, Alternative, Administrative, and E-Dispute Resolution

Torts and Strict Liability

Criminal Law and Cyber Crimes

Intellectual Property and Cyber Piracy

Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

Agreement and Consideration

Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales, Lease, and E-Contracts

Performance of Sales, Leases and E-Contracts

Remedies for Breach of Sales and Lease Contracts

Warranties and Product Liability

Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System, E-Money, and Financial Reform

Credit and Secured Transactions

Bankruptcy and Reorganization

Agency Law

Small Business, Entrepreneurship, and Partnerships

Corporate Governance and Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Company and Limited Liability Partnership

Franchise and Special Forms of Business

Investor Protection,E-Securities Transactions,and Wall Street Reform

Antitrust Law

Consumer Safety, Consumer Financial Protection, and Environmental Protection

Labor, Worker Protection, Employment, and Immigration Law

Equal Opportunity in Employment

Personal Property, Bailment, and Insurance

Real Property, Landlord-Tenant Law, and Land Use Regulation

Family Law, Wills, and Trusts

Accountants' Liability

International and World Trade Law

Filters