Exam 36: Corporate Formation and Financing

Jane wishes to create a corporation to operate an art gallery.She completes the articles of incorporation and mails them to the appropriate state office.Then,she leases space,hires a receptionist,buys supplies,and contracts with artists to exhibit their artwork,all on behalf of her corporation.Sometime later,the state issues its certificate of incorporation. A.Discuss the liability of Jane and the corporation with regard to these contracts Jane has made. B.Discuss novation based upon the above fact situation.

The dissolution of a corporation impairs all rights and remedies available against the corporation or its directors,or officers,or shareholders.

A professional corporation is one that:

The law governing the formation and operation of corporations is all at the state level.

The first meeting of the board of directors after the bylaws are filed is called the:

Preferred stockholders have limited liability just like common stockholders.

Corporations' express powers come from both federal and state statutes,among other sources.

A corporation's existence is not affected by the death or insanity of a shareholder.

A promoter enters into a contract on behalf of a proposed corporation.The corporation has not yet come into existence.Which of the following statements best describes the promoter's liability on this contract?

Preferred stock generally pays a higher rate of return than common stock.

An entrepreneur can form a business with only one owner under which of the following forms?

Which of the following best describes how a corporation,which has not made any special tax elections,and its shareholders,are taxed?

Every corporation must have a registered office and registered agent and these must be identified in the articles of incorporation.

Jill invests $1,000 to buy 10 shares of Good Corporation.The corporation goes bankrupt having no assets and $1 million in liabilities.The most Jill can lose is the $1,000 she invested.This is an example of the corporate characteristic of:

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

Henry wants to form a business that rents chain saws and tree climbing equipment to persons who desire to do major tree-removal work themselves rather than hire others to do the job.Henry had not planned to incorporate this business because he had always heard that forming a corporation was difficult and expensive.A friend suggests that he might want to incorporate in order to have limited liability.Briefly describe the steps for Henry to incorporate.

Which of the following statements is true?

An alien corporation is a corporation that does business in a state other than the one in which it is incorporated.

Corporations receive powers from which of the following sources?

ABC Corporation is incorporated in state X.Under the laws of state X,no corporation is allowed to sell insurance contracts without first obtaining a license from the state.ABC sells an insurance contract,but neither ABC nor its directors,officers,or employees have the required license.ABC's actions are best described as: