Question 1

Use of "Evans & Hall, 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)  impermissible because it includes surnames. 
D)  permissible because the selection of a corporate name is purely up to the organizers of the corporation. 
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)  impermissible because it includes surnames. 
D)  permissible because the selection of a corporate name is purely up to the organizers of the corporation.

Question 2

Corporations have achieved dominance in which of the following ways?

Accepted Answer

A)  This form of organization accounts for 85 percent of the gross revenues of all business entities. 
B)  Over 50 percent of all U.S. businesses are organized in the corporate form. 
C)  Over 75 percent of American adults own stock directly or indirectly. 
D)  All of these. 
A)  This form of organization accounts for 85 percent of the gross revenues of all business entities. 
B)  Over 50 percent of all U.S. businesses are organized in the corporate form. 
C)  Over 75 percent of American adults own stock directly or indirectly. 
D)  All of these.

Question 3

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 4

Under the Statutory Close Corporation Supplement to the MBCA, a close corporation must have bylaws on file with the office of the secretary of state or some other public office.

Accepted Answer

A) True 
 B)False

Question 5

A preincorporation subscription is an offer to purchase capital stock in a corporation yet to be formed.

Accepted Answer

A) True 
 B)False

Question 6

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 7

All of the following are characteristics of a corporation EXCEPT:

Accepted Answer

A)  it has perpetual existence. 
B)  it is a legal entity of its own. 
C)  it is able to be sued and to sue. 
D)  it is usually managed by its shareholders. 
A)  it has perpetual existence. 
B)  it is a legal entity of its own. 
C)  it is able to be sued and to sue. 
D)  it is usually managed by its shareholders.

Question 8

Bylaws are rules governing a corporation's internal management.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Promoters have a fiduciary relationship with the corporation.

Accepted Answer

A) True 
 B)False

Question 11

A corporation has no constitutional protection against unreasonable searches and seizures.

Accepted Answer

A) True 
 B)False

Question 12

The case of Harris v. Looney dealt with the issue of:

Accepted Answer

A)  a de facto corporation. 
B)  defective incorporation. 
C)  personal liability for a debt by a person purporting to act as or on behalf of a corporation, knowing no corporation existed. 
D)  the effect of an ultra vires act. 
A)  a de facto corporation. 
B)  defective incorporation. 
C)  personal liability for a debt by a person purporting to act as or on behalf of a corporation, knowing no corporation existed. 
D)  the effect of an ultra vires act.

Question 13

Once a shareholder sells the stock of the corporation, since the ownership of the corporation changes, a new corporation is formed.

Accepted Answer

A) True 
 B)False

Question 14

Under the RMBCA, a pre-incorporation subscription may be revoked at any time without the consent of the subscribers.

Accepted Answer

A) True 
 B)False

Question 15

Estoppel may create a corporation.

Accepted Answer

A) True 
 B)False

Question 16

All of the following are true of promoters of a corporation EXCEPT:

Accepted Answer

A)  They solicit investors to begin the corporation. 
B)  They prepare the formal documents of incorporation. 
C)  They may make contracts in the name of the corporation. 
D)  They continue to solicit capital whenever needed after incorporation. 
A)  They solicit investors to begin the corporation. 
B)  They prepare the formal documents of incorporation. 
C)  They may make contracts in the name of the corporation. 
D)  They continue to solicit capital whenever needed after incorporation.

Question 17

Carroll, Daniels, and Elmore organized their veterinary practice as a professional corporation. This organization of professionals will be treated as a partnership for liability purposes.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not a requirement of a Subchapter S corporation?

Accepted Answer

A)  It must be a domestic corporation. 
B)  It must have no more than 50 shareholders. 
C)  A corporation or partnership cannot be a shareholder. 
D)  It may have only one class of stock. 
A)  It must be a domestic corporation. 
B)  It must have no more than 50 shareholders. 
C)  A corporation or partnership cannot be a shareholder. 
D)  It may have only one class of stock.

Question 19

Big Burger Co. sues Bakum Corporation for breach of contract for $1,000 of hamburger buns that were not delivered. Bakum may assert as a defense to payment that Big Burger is not a de jure corporation.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 33: Nature and Formation of Corporations

Use of "Evans & Hall, Ltd." as a corporate name would be:

Corporations have achieved dominance in which of the following ways?

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

Under the Statutory Close Corporation Supplement to the MBCA, a close corporation must have bylaws on file with the office of the secretary of state or some other public office.

A preincorporation subscription is an offer to purchase capital stock in a corporation yet to be formed.

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

All of the following are characteristics of a corporation EXCEPT:

Bylaws are rules governing a corporation's internal management.

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

Promoters have a fiduciary relationship with the corporation.

A corporation has no constitutional protection against unreasonable searches and seizures.

The case of Harris v. Looney dealt with the issue of:

Once a shareholder sells the stock of the corporation, since the ownership of the corporation changes, a new corporation is formed.

Under the RMBCA, a pre-incorporation subscription may be revoked at any time without the consent of the subscribers.

Estoppel may create a corporation.

All of the following are true of promoters of a corporation EXCEPT:

Carroll, Daniels, and Elmore organized their veterinary practice as a professional corporation. This organization of professionals will be treated as a partnership for liability purposes.

Which of the following is not a requirement of a Subchapter S corporation?

Big Burger Co. sues Bakum Corporation for breach of contract for $1,000 of hamburger buns that were not delivered. Bakum may assert as a defense to payment that Big Burger is not a de jure corporation.

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

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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