Exam 37: Corporate Formation and Financing

Quorum requirements vary among jurisdictions.

With the exception of malpractice, liability for torts committed by others in a firm cannot be imposed on the shareholders of

Directors have a right to be notified of all board meetings.

The initial board of directors of a corporation is normally appointed by the incorporators when the corporation is created.

The primary document needed to incorporate a business is the bylaws-the primary source of guidelines for the firm's management and operation.

Molly is a director and Ned is an officer of Online Education Inc. Liability for the torts of employees under their supervision may extend to

Eton owns Fast Freight Company. He uses the firm's funds to pay his personal expenses, creates Go Trucking Inc. to engage in the same business, transfers Fast Freight's assets to Go Trucking, and petitions Fast Freight into bankruptcy. This most likely warrants

A court will pierce the corporate veil of a corporation when the corporate privilege is abused for personal benefit.

A corporation needs to be careful about whom it hires because a firm may be liable for the misconduct of its employees.

If a business says it is a corporation, and a third party deals with it as a corporation, neither party can question the validity of the business's status.

Individual state laws should be relied on to determine corporate law because, despite the existence and use of model corporation acts, there is considerable variation among the states.

A director's right to access the corporation's books can be restricted by the corporate articles.

With respect to a corporation, an officer's rights are defined by

A business firm whose shares are held by a single person may be a sole proprietorship, but it cannot a corporation.

The primary document needed to incorporate a business is the articles of incorporation-the primary source of authority for the firm's organization and functions.

A shareholder in a professional corporation generally cannot be held liable for malpractice by other professionals at the firm.

A corporation is recognized under U.S. law as a person.

Stocks, or equity securities, represent the purchase of ownership in the business firm.

Drones Inc. has three directors, a president, two vice presidents, a secretary, and a treasurer. Ethel is a Drone director. In most states, Ethel can also hold a Drone corporate office

A corporation is