Question 1

Use of "Stewart and Woods, Ltd." as a corporate name would be:

Accepted Answer

A)  permissible as long as it is distinguishable from the name of any domestic corporation or any foreign corporation authorized to do business within the state. 
B)  impermissible because it does not clearly designate that the organization is a corporation. 
C)  permissible because the selection of a corporate name is purely up to the organizers of the corporation. 
D)  impermissible because it includes surnames. 
A)  permissible as long as it is distinguishable from the name of any domestic corporation or any foreign corporation authorized to do business within the state. 
B)  impermissible because it does not clearly designate that the organization is a corporation. 
C)  permissible because the selection of a corporate name is purely up to the organizers of the corporation. 
D)  impermissible because it includes surnames.

Question 2

Define "promoter" in reference to a corporation.

Accepted Answer

A promoter is a person who brings about

Question 3

"Piercing the corporate veil" will result in personal liability of shareholders.

Accepted Answer

A) True 
 B)False

Question 4

Bylaws are rules governing a corporation's internal management.

Accepted Answer

A) True 
 B)False

Question 5

Estoppel may create a corporation.

Accepted Answer

A) True 
 B)False

Question 6

An  ultra vires   act  is beyond the legal authority of the corporation.

Accepted Answer

A) True 
 B)False

Question 7

What is a Subchapter S Corporation, and what are its requirements?

Accepted Answer

Subchapter S of the Internal Revenue Cod

Question 8

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 9

A corporation is considered a citizen:

Accepted Answer

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

Question 10

Which of the following is correct regarding the characteristics of a corporation?

Accepted Answer

A)  A corporation is considered a person within the meaning of the Fourteenth Amendment's equal protection clause. 
B)  The Fifth Amendment provisions against self-incrimination protect a corporation. 
C)  A corporation is protected by the Fourth Amendment's provision against unreasonable searches and seizures. 
D)  A corporation is considered a person within the meaning of the Fourteenth Amendment's equal protection clause and  is also protected by the Fourth Amendment's provision against unreasonable searches and seizures. 
A)  A corporation is considered a person within the meaning of the Fourteenth Amendment's equal protection clause. 
B)  The Fifth Amendment provisions against self-incrimination protect a corporation. 
C)  A corporation is protected by the Fourth Amendment's provision against unreasonable searches and seizures. 
D)  A corporation is considered a person within the meaning of the Fourteenth Amendment's equal protection clause and  is also protected by the Fourth Amendment's provision against unreasonable searches and seizures.

Question 11

A benefit corporation , also called a public benefit corporation or B-corporation, is a corporate entity whose legally defined goals are only having a positive impact on society and the environment, not making a profit.

Accepted Answer

A) True 
 B)False

Question 12

Shareholders do not have limited liability for corporate debts.

Accepted Answer

A) True 
 B)False

Question 13

Under the RMBCA, the charter of the corporation is required to provide all of the following EXCEPT:

Accepted Answer

A)  the number of shares authorized. 
B)  names of the initial directors. 
C)  the street address of the registered office. 
D)  the name and address of each incorporator. 
A)  the number of shares authorized. 
B)  names of the initial directors. 
C)  the street address of the registered office. 
D)  the name and address of each incorporator.

Question 14

The president of Rosy Cosmetics sends his top chemist to it main competitor, Hi-Glow's, labs to steal its formula for shiny lipstick.The chemist gets caught and is sent to jail.Can Rosy be found to be criminally liable?

Accepted Answer

A)  No, unless the chemist broke in and stole the formula. 
B)  Yes, since the president authorized the crime. 
C)  No, because a corporation cannot go to jail. 
D)  Yes, under the doctrine of ultra vires . 
A)  No, unless the chemist broke in and stole the formula. 
B)  Yes, since the president authorized the crime. 
C)  No, because a corporation cannot go to jail. 
D)  Yes, under the doctrine of ultra vires .

Question 15

Corporate powers granted by the RMBCA include all but which of the following?

Accepted Answer

A)  To make charitable donations. 
B)  To be considered a person under the Fourth Amendment's search and seizures clause and the Fifth Amendment's self-incrimination clause. 
C)  To borrow and lend money. 
D)  To establish profit-sharing plans and other employee benefit plans. 
A)  To make charitable donations. 
B)  To be considered a person under the Fourth Amendment's search and seizures clause and the Fifth Amendment's self-incrimination clause. 
C)  To borrow and lend money. 
D)  To establish profit-sharing plans and other employee benefit plans.

Question 16

A benefit corporation must periodically report on its promotion of the public benefit and of the best interests of those materially affected by the corporation's conduct.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Under the RMBCA, a newly formed corporation need not hold an organizational meeting.

Accepted Answer

A) True 
 B)False

Question 19

The doctrine of ultra vires is of more significance today than it has been in the past.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 33: Nature and Formation of Corporations

Use of "Stewart and Woods, Ltd." as a corporate name would be:

Define "promoter" in reference to a corporation.

"Piercing the corporate veil" will result in personal liability of shareholders.

Bylaws are rules governing a corporation's internal management.

Estoppel may create a corporation.

An ultra vires act is beyond the legal authority of the corporation.

What is a Subchapter S Corporation, and what are its requirements?

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

A corporation is considered a citizen:

Which of the following is correct regarding the characteristics of a corporation?

A benefit corporation , also called a public benefit corporation or B-corporation, is a corporate entity whose legally defined goals are only having a positive impact on society and the environment, not making a profit.

Shareholders do not have limited liability for corporate debts.

Under the RMBCA, the charter of the corporation is required to provide all of the following EXCEPT:

The president of Rosy Cosmetics sends his top chemist to it main competitor, Hi-Glow's, labs to steal its formula for shiny lipstick.The chemist gets caught and is sent to jail.Can Rosy be found to be criminally liable?

Corporate powers granted by the RMBCA include all but which of the following?

A benefit corporation must periodically report on its promotion of the public benefit and of the best interests of those materially affected by the corporation's conduct.

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

Under the RMBCA, a newly formed corporation need not hold an organizational meeting.

The doctrine of ultra vires is of more significance today than it has been in the past.

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:

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

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 Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

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 Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

Filters