Question 1

From the perspective of Texas, a California corporation is considered a foreign corporation.

Accepted Answer

A) True 
 B)False

Question 2

Corporations come into existence as the result of the activities of one or more persons known as promoters.

Accepted Answer

A) True 
 B)False

Question 3

If there is a consolidation of corporations A, B, and C: ______.

Accepted Answer

A)  corporations B and C are absorbed into corporation A, and corporation A continues to exist. 
B)  all of the corporations continue to exist. 
C)  all corporations continue to exist, but corporation A owns all of the stock of corporations B and C. 
D)  corporations A, B, and C cease to exist, and a new corporation with the property and assets of the old corporations comes into being. 
A)  corporations B and C are absorbed into corporation A, and corporation A continues to exist. 
B)  all of the corporations continue to exist. 
C)  all corporations continue to exist, but corporation A owns all of the stock of corporations B and C. 
D)  corporations A, B, and C cease to exist, and a new corporation with the property and assets of the old corporations comes into being.

Question 4

Under the RMBCA, corporate existence begins when the articles of incorporation are filed with the secretary of state.

Accepted Answer

A) True 
 B)False

Question 5

If the proper procedure for incorporation has been followed, the corporation has a legal right to exist and is called a(n): ______.

Accepted Answer

A)  corporation by estoppel 
B)  de jure corporation. 
C)  de facto corporation. 
D)  ultra vires corporation. 
A)  corporation by estoppel 
B)  de jure corporation. 
C)  de facto corporation. 
D)  ultra vires corporation.

Question 6

A corporation may be an incorporator of another corporation.

Accepted Answer

A) True 
 B)False

Question 7

B-Corporations are for-profit corporations that create public benefits while providing economic returns to their investors.

Accepted Answer

A) True 
 B)False

Question 8

What is not a correct statement concerning promoters?

Accepted Answer

A)  Promoters are generally active before the corporation is formed. 
B)  Two (2) or more promoters are required to form a corporation. 
C)  Promoters are fiduciaries with respect to the corporation and its shareholders. 
D)  Promoters are liable for any torts that they commit while promoting the corporation. 
A)  Promoters are generally active before the corporation is formed. 
B)  Two (2) or more promoters are required to form a corporation. 
C)  Promoters are fiduciaries with respect to the corporation and its shareholders. 
D)  Promoters are liable for any torts that they commit while promoting the corporation.

Question 9

The Revised Model Business Corporation Act: ______.

Accepted Answer

A)  has eliminated the certificate of incorporation. 
B)  has made the process of incorporation more difficult. 
C)  states that corporate existence begins when the secretary of state issues a certificate of incorporation. 
D)  has eliminated the need for articles of incorporation. 
A)  has eliminated the certificate of incorporation. 
B)  has made the process of incorporation more difficult. 
C)  states that corporate existence begins when the secretary of state issues a certificate of incorporation. 
D)  has eliminated the need for articles of incorporation.

Question 10

A merger is subject to antitrust law, while a corporate consolidation is not.

Accepted Answer

A) True 
 B)False

Question 11

Corporations may avoid liability for the obligations of a predecessor corporation by treating a consolidation or merger as a sale of assets.

Accepted Answer

A) True 
 B)False

Question 12

A de facto corporation is not accorded legal recognition due to some recognized defect in its incorporation.

Accepted Answer

A) True 
 B)False

Question 13

"Conglomerate" describes the relationship of equal companies engaged in similar fields of business activity.

Accepted Answer

A) True 
 B)False

Question 14

Under recent statutes, the articles of incorporation must contain all of the following except the: ______.

Accepted Answer

A)  name of the corporation. 
B)  name and address of each incorporator. 
C)  purpose for which the corporation is organized. 
D)  number of shares the corporation is authorized to issue. 
A)  name of the corporation. 
B)  name and address of each incorporator. 
C)  purpose for which the corporation is organized. 
D)  number of shares the corporation is authorized to issue.

Question 15

In order to qualify as a close corporation, the majority of shares must be held by one person.

Accepted Answer

A) True 
 B)False

Question 16

Subchapter S corporations have the benefits of limited liability as in partnerships and are taxed as corporations.

Accepted Answer

A) True 
 B)False

Question 17

After a corporate charter has been forfeited, the owners and officers of the dissolved corporation are __________ shielded from personal liability by using the corporate name when making contracts.

Accepted Answer

A)  still 
B)  conditionally 
C)  not 
D)  retroactively 
A)  still 
B)  conditionally 
C)  not 
D)  retroactively

Question 18

When a corporation acts in excess of or beyond the scope of its powers, the corporation's act is described as "ultra vires."

Accepted Answer

A) True 
 B)False

Question 19

In a merger or consolidation, the surviving corporation generally succeeds to all the rights and property of the predecessor.

Accepted Answer

A) True 
 B)False

Question 20

A state's police power may create any kind of corporation for any purpose.

Accepted Answer

A) True 
 B)False

Exam 43: Corporate Formation

From the perspective of Texas, a California corporation is considered a foreign corporation.

Corporations come into existence as the result of the activities of one or more persons known as promoters.

If there is a consolidation of corporations A, B, and C: ______.

Under the RMBCA, corporate existence begins when the articles of incorporation are filed with the secretary of state.

If the proper procedure for incorporation has been followed, the corporation has a legal right to exist and is called a(n): ______.

A corporation may be an incorporator of another corporation.

B-Corporations are for-profit corporations that create public benefits while providing economic returns to their investors.

What is not a correct statement concerning promoters?

The Revised Model Business Corporation Act: ______.

A merger is subject to antitrust law, while a corporate consolidation is not.

Corporations may avoid liability for the obligations of a predecessor corporation by treating a consolidation or merger as a sale of assets.

A de facto corporation is not accorded legal recognition due to some recognized defect in its incorporation.

"Conglomerate" describes the relationship of equal companies engaged in similar fields of business activity.

Under recent statutes, the articles of incorporation must contain all of the following except the: ______.

In order to qualify as a close corporation, the majority of shares must be held by one person.

Subchapter S corporations have the benefits of limited liability as in partnerships and are taxed as corporations.

After a corporate charter has been forfeited, the owners and officers of the dissolved corporation are __________ shielded from personal liability by using the corporate name when making contracts.

When a corporation acts in excess of or beyond the scope of its powers, the corporation's act is described as "ultra vires."

In a merger or consolidation, the surviving corporation generally succeeds to all the rights and property of the predecessor.

A state's police power may create any kind of corporation for any purpose.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters