Question 1

A corporation owned by a single person is treated under the law as the same entity as that person.

Accepted Answer

A) True 
 B)False

Question 2

Bill Bonney, the sole stockholder of Kidd Corporation, wrongfully used the corporation to avoid a personal liability. A court order that disregards the corporate entity and holds Bonney personally liable is called:

Accepted Answer

A)  limited liability. 
B)  ultra vires. 
C)  diversity of interest. 
D)  piercing the corporate veil. 
A)  limited liability. 
B)  ultra vires. 
C)  diversity of interest. 
D)  piercing the corporate veil.

Question 3

What powers does a corporation normally possess?

Accepted Answer

The general powers granted by incorporat

Question 4

The Revised Act provides that at least two persons need to act as incorporators, though more may do so.

Accepted Answer

A) True 
 B)False

Question 5

What are the consequences of a defective incorporation?

Accepted Answer

The possible consequences of a defective

Question 6

Shareholders do not have limited liability for corporate debts.

Accepted Answer

A) True 
 B)False

Question 7

A corporation is considered to be a person within the meaning of the Fifth Amendment protection against self-incrimination.

Accepted Answer

A) True 
 B)False

Question 8

Define "promoter" in reference to a corporation.

Accepted Answer

A promoter is a person who brings about

Question 9

Subchapter S is a section of the Model Business Corporation Act that provides special benefits for small corporations.

Accepted Answer

A) True 
 B)False

Question 10

The RMBCA has been adopted, in whole or in part, by most states.

Accepted Answer

A) True 
 B)False

Question 11

Snazzy Sneakers Co. sues SureFast Glue Corporation for breach of contract for $2,400 of shoe glue that was not delivered according to their agreement. SureFast may assert as a defense to payment that Snazzy Sneakers is not a de jure corporation.

Accepted Answer

A) True 
 B)False

Question 12

Under the RMBCA, the bylaws may be amended and must be publicly filed with the articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 13

What is the doctrine of ultra vires ? What is the effect of an ultra vires contract?

Accepted Answer

Ultra vires acts are without legal autho

Question 14

The modern approach follows the common law rule in holding that a corporation cannot commit a criminal act.

Accepted Answer

A) True 
 B)False

Question 15

A corporation is considered a citizen:

Accepted Answer

A)  of the state in which it has its principal office, for the purpose of determining diversity of citizenship. 
B)  of the state of its incorporation, for the purpose of determining diversity of citizenship. 
C)  in both of these situations. 
D)  in neither of these situations. 
A)  of the state in which it has its principal office, for the purpose of determining diversity of citizenship. 
B)  of the state of its incorporation, for the purpose of determining diversity of citizenship. 
C)  in both of these situations. 
D)  in neither of these situations.

Question 16

A promoter is a person who takes the preliminary steps to organize a corporation.

Accepted Answer

A) True 
 B)False

Question 17

If incorporated, the City of Chicago would best be described as which of the following?

Accepted Answer

A)  A corporation formed pursuant to the Model Business Corporation Act. 
B)  A close corporation. 
C)  A public corporation. 
D)  A domestic corporation. 
A)  A corporation formed pursuant to the Model Business Corporation Act. 
B)  A close corporation. 
C)  A public corporation. 
D)  A domestic corporation.

Question 18

Norez Corporation is incorporated in the state of Nevada. It now wants to open a retail outlet in Utah. Norez must obtain a certificate qualifying it to do business in the state of Utah .

Accepted Answer

A) True 
 B)False

Question 19

Opal, a promoter of Victory Corporation, has a fiduciary duty to:

Accepted Answer

A)  any other promoters of Victory Corporation. 
B)  only Victory Corporation. 
C)  the initial shareholders of Victory Corporation. 
D)  A ny other promoters of Victory Corporation and also  the initial shareholders of Victory Corporation. 
A)  any other promoters of Victory Corporation. 
B)  only Victory Corporation. 
C)  the initial shareholders of Victory Corporation. 
D)  A ny other promoters of Victory Corporation and also  the initial shareholders of Victory Corporation.

Question 20

The Revised Act authorizes shareholders in closely held corporations to adopt shareholder agreements that depart from statutory norms by altering the governance of the corporation. These agreements:

Accepted Answer

A)  are effective if adopted by a majority of the shareholders. 
B)  are valid for the life of the corporation unless a new agreement is reached. 
C)  are binding on shareholders, the state, creditors, and other third parties. 
D)  terminate automatically if the corporation's shares are traded publicly. 
A)  are effective if adopted by a majority of the shareholders. 
B)  are valid for the life of the corporation unless a new agreement is reached. 
C)  are binding on shareholders, the state, creditors, and other third parties. 
D)  terminate automatically if the corporation's shares are traded publicly.

Exam 33: Nature and Formation of Corporations

A corporation owned by a single person is treated under the law as the same entity as that person.

Bill Bonney, the sole stockholder of Kidd Corporation, wrongfully used the corporation to avoid a personal liability. A court order that disregards the corporate entity and holds Bonney personally liable is called:

What powers does a corporation normally possess?

The Revised Act provides that at least two persons need to act as incorporators, though more may do so.

What are the consequences of a defective incorporation?

Shareholders do not have limited liability for corporate debts.

A corporation is considered to be a person within the meaning of the Fifth Amendment protection against self-incrimination.

Define "promoter" in reference to a corporation.

Subchapter S is a section of the Model Business Corporation Act that provides special benefits for small corporations.

The RMBCA has been adopted, in whole or in part, by most states.

Snazzy Sneakers Co. sues SureFast Glue Corporation for breach of contract for $2,400 of shoe glue that was not delivered according to their agreement. SureFast may assert as a defense to payment that Snazzy Sneakers is not a de jure corporation.

Under the RMBCA, the bylaws may be amended and must be publicly filed with the articles of incorporation.

What is the doctrine of ultra vires ? What is the effect of an ultra vires contract?

The modern approach follows the common law rule in holding that a corporation cannot commit a criminal act.

A corporation is considered a citizen:

A promoter is a person who takes the preliminary steps to organize a corporation.

If incorporated, the City of Chicago would best be described as which of the following?

Norez Corporation is incorporated in the state of Nevada. It now wants to open a retail outlet in Utah. Norez must obtain a certificate qualifying it to do business in the state of Utah .

Opal, a promoter of Victory Corporation, has a fiduciary duty to:

The Revised Act authorizes shareholders in closely held corporations to adopt shareholder agreements that depart from statutory norms by altering the governance of the corporation. These agreements:

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

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

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

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 Wills

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