Exam 29: Formation and Ownership of a Corporation

Spicy Wings Corporation makes a good faith attempt to incorporate but there is a defect in its incorporation. Spicy undertakes business as a corporation. In this circumstance, Spicy's is most likely

Generally, a shareholder has no right to transfer his or her shares to another party without the consent of the corporation.

The main government agency that administers the federal securities laws is

EZ Hauling holds itself out to customers as being a corporation but makes no attempt to incorporate. In this circumstance, EZ Hauling is most likely

Many states allow dividends to be paid out of corporate savings, but not out of undistributed net profits.

Burgers & Brew Inc. prepares its articles of incorporation. The articles are likely to include

A corporation enjoys many of the same rights under the law that natural persons enjoy.

A corporation is recognized by law as a "person."

Shareholders must approve a merger of the corporation .

Bonds

A corporation is owned by its

Insider trading occurs when persons buy or sell securities on the basis of information that is not available to the public.

Sweetwater Corporation is incorporated in Texas. In that state, the firm is referred to as

Leo, the chief executive officer of Moon Resort Inc., intentionally understates the amount of the firm's debts in the prospectus for an issue of stock. Nell buys the stock and suffers a loss. Leo may be subject to

A shareholder who has a preemptive right has the right to preempt the declaration of a dividend.

Ridley is an officer of Sun Watts, Inc. Ridley knows that a Sun Watts engineer recently developed a new, inexpensive method for collecting, storing, and converting solar power into fuel. Ridley takes advantage of this information to buy Sun Watts stock from Taylor and, after the discovery is announced publicly, to sell the stock to Ulrich at a profit. Taylor claims that this is a violation of federal law. Is Taylor correct? If so, what federal law has Ridley violated? Explain.

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

Acts of a corporation that are beyond the authority granted to it under its charter or under the statutes by which it was incorporated are ultra vires acts .

Sharon is a shareholder in Travel Adventures Inc. As a shareholder, Sharon

Rob owns Solar Corporation. He uses one bank account for all of his personal money and the corporation's money to the extent that the corporation cannot be separately identified financially. This most likely warrants