Question 1

The abbreviation "P.A." in the name "Conrad & Drake, Accountants, P.A." means that this organization is

Accepted Answer

A)  ​a private association. 
B)  ​a professional association. 
C)  ​a public association. 
D)  ​a publicly administered corporation. 
A)  ​a private association. 
B)  ​a professional association. 
C)  ​a public association. 
D)  ​a publicly administered corporation.

Question 2

One of the key advantages of the corporate form is the unlimited liability of its owners.

Accepted Answer

A) True 
 B)False

Question 3

Stocks represent the borrowing of funds by firms.

Accepted Answer

A) True 
 B)False

Question 4

The purpose of a corporation may not be specified in its articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 5

The date when the principal of a bond is returned to the investor is the maturity date.

Accepted Answer

A) True 
 B)False

Question 6

Like the bylaws of other corporations, the bylaws of Rocks, Paper & Scissors, Inc.,

Accepted Answer

A)  ​establish the operating name of the corporation. 
B)  ​establish the value and classes of corporate stock. 
C)  ​were adopted at its first organizational meeting. 
D)  ​were submitted for approval to the public official in charge. 
A)  ​establish the operating name of the corporation. 
B)  ​establish the value and classes of corporate stock. 
C)  ​were adopted at its first organizational meeting. 
D)  ​were submitted for approval to the public official in charge.

Question 7

Selecting the state in which to incorporate is an important step in the incorporation procedure.

Accepted Answer

A) True 
 B)False

Question 8

Vince buys 500 shares of common stock in Water Services, Inc. As a shareholder of record, Vince owns a proportionate interest with regard to Water's

Accepted Answer

A)  ​net assets. 
B)  ​control. 
C)  ​earnings. 
D)  ​all of the choices. 
A)  ​net assets. 
B)  ​control. 
C)  ​earnings. 
D)  ​all of the choices.

Question 9

A de jure corporation is one that is formed for a single purpose.

Accepted Answer

A) True 
 B)False

Question 10

In certain instances of fraud, a court may "pierce the corporate veil" to hold the shareholders individually liable.

Accepted Answer

A) True 
 B)False

Question 11

Bay City Merchants Corporation has six shareholders, four of whom are members of the same family. All of Bay City's shareholders agree in writing to operate without shareholders' meetings. Under the Revised Model Business Corporation Act, this most likely warrants

Accepted Answer

A)  ​no penalties or sanctions. 
B)  ​the imposition of a fine on Bay City. 
C)  ​the imprisonment of Bay City's shareholders. 
D)  ​the piercing of Bay City's corporate veil. 
A)  ​no penalties or sanctions. 
B)  ​the imposition of a fine on Bay City. 
C)  ​the imprisonment of Bay City's shareholders. 
D)  ​the piercing of Bay City's corporate veil.

Question 12

Jen and Kay would like to form Lunch Garden, Inc., to enter the food vending business. Most likely, the articles of incorporation for the firm will not include

Accepted Answer

A)  ​the corporate name. 
B)  ​the name and address of a registered agent. 
C)  ​the number of shares that the corporation is authorized to issue. 
D)  ​the minutes of the first organizational meeting. 
A)  ​the corporate name. 
B)  ​the name and address of a registered agent. 
C)  ​the number of shares that the corporation is authorized to issue. 
D)  ​the minutes of the first organizational meeting.

Question 13

A foreign corporation normally does not need a certificate of authority to sell goods or services via the Internet.

Accepted Answer

A) True 
 B)False

Question 14

​Ruby Red Corporation is incorporated in South Carolina. In that state, Ruby Red is

Accepted Answer

A)  ​a domestic corporation. 
B)  ​a foreign corporation. 
C)  ​an alien corporation. 
D)  ​a non-entity. 
A)  ​a domestic corporation. 
B)  ​a foreign corporation. 
C)  ​an alien corporation. 
D)  ​a non-entity.

Question 15

Tech Talent, Inc., is a corporation. Techno Talent's implied powers enable it to

Accepted Answer

A)  ​none of the choices. 
B)  ​depart significantly from traditional corporate formalities. 
C)  ​bind the corporation to an action that will greatly affect its purpose. 
D)  ​borrow funds and lend funds. 
A)  ​none of the choices. 
B)  ​depart significantly from traditional corporate formalities. 
C)  ​bind the corporation to an action that will greatly affect its purpose. 
D)  ​borrow funds and lend funds.

Question 16

Integrated Devices, Inc., is a private, for-profit corporation that is owned by five shareholders who are members of the same family. Integrated is

Accepted Answer

A)  ​an S corporation. 
B)  a close corporation.​ 
C)  ​a nonprofit corporation. 
D)  ​none of the choices. 
A)  ​an S corporation. 
B)  a close corporation.​ 
C)  ​a nonprofit corporation. 
D)  ​none of the choices.

Question 17

Ben incorporates his app business as Clickology, Inc. Under most state corporation statutes, Clickology can have

Accepted Answer

A)  ​only a finite, yet-to-be-determined existence. 
B)  ​only a one-year, nonrenewable existence. 
C)  ​only a one-year, renewable existence. 
D)  ​perpetual existence. 
A)  ​only a finite, yet-to-be-determined existence. 
B)  ​only a one-year, nonrenewable existence. 
C)  ​only a one-year, renewable existence. 
D)  ​perpetual existence.

Question 18

Wiley incorporates his business as Wiley's Wire Inc. in Arizona. He and his group of shareholders intend to make a profit from their sales of fencing wire. Wiley's is

Accepted Answer

A)  ​a nonprofit corporation. 
B)  ​not a corporation. 
C)  ​a benefit corporation. 
D)  ​a private corporation. 
A)  ​a nonprofit corporation. 
B)  ​not a corporation. 
C)  ​a benefit corporation. 
D)  ​a private corporation.

Question 19

An agreement between shareholders can restrict the transfer of a close corporation's stock.

Accepted Answer

A) True 
 B)False

Question 20

Ida and Jay are the shareholders and the directors of Keystone Property Management Inc. Lily and Mike are Keystone officers. The responsibility for the overall management of this firm rests with

Accepted Answer

A)  ​Ida and Jay, as the directors. 
B)  ​Lily and Mike, as the officers. 
C)  ​Ida and Jay, as the shareholders. 
D)  ​all of the parties. 
A)  ​Ida and Jay, as the directors. 
B)  ​Lily and Mike, as the officers. 
C)  ​Ida and Jay, as the shareholders. 
D)  ​all of the parties.

Exam 39: Corporate Formation and Financing

The abbreviation "P.A." in the name "Conrad & Drake, Accountants, P.A." means that this organization is

One of the key advantages of the corporate form is the unlimited liability of its owners.

Stocks represent the borrowing of funds by firms.

The purpose of a corporation may not be specified in its articles of incorporation.

The date when the principal of a bond is returned to the investor is the maturity date.

Like the bylaws of other corporations, the bylaws of Rocks, Paper & Scissors, Inc.,

Selecting the state in which to incorporate is an important step in the incorporation procedure.

Vince buys 500 shares of common stock in Water Services, Inc. As a shareholder of record, Vince owns a proportionate interest with regard to Water's

A de jure corporation is one that is formed for a single purpose.

In certain instances of fraud, a court may "pierce the corporate veil" to hold the shareholders individually liable.

Bay City Merchants Corporation has six shareholders, four of whom are members of the same family. All of Bay City's shareholders agree in writing to operate without shareholders' meetings. Under the Revised Model Business Corporation Act, this most likely warrants

Jen and Kay would like to form Lunch Garden, Inc., to enter the food vending business. Most likely, the articles of incorporation for the firm will not include

A foreign corporation normally does not need a certificate of authority to sell goods or services via the Internet.

​Ruby Red Corporation is incorporated in South Carolina. In that state, Ruby Red is

Tech Talent, Inc., is a corporation. Techno Talent's implied powers enable it to

Integrated Devices, Inc., is a private, for-profit corporation that is owned by five shareholders who are members of the same family. Integrated is

Ben incorporates his app business as Clickology, Inc. Under most state corporation statutes, Clickology can have

Wiley incorporates his business as Wiley's Wire Inc. in Arizona. He and his group of shareholders intend to make a profit from their sales of fencing wire. Wiley's is

An agreement between shareholders can restrict the transfer of a close corporation's stock.

Ida and Jay are the shareholders and the directors of Keystone Property Management Inc. Lily and Mike are Keystone officers. The responsibility for the overall management of this firm rests with

Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Business and the Constitution

Business Ethics

Tort Law

Strict Liability and Product Liability

Intellectual Property Rights

Internet Law, Social Media, and Privacy

Criminal Law and Cyber Crime

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

The Writing Requirement in Our Digital World

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance and Breach of Sales and Lease Contracts

Warranties

International and Space Law

Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Banking in the Digital Age

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Agency Liability and Termination

Employment, Immigration, and Labor Law

Employment Discrimination

Small Businesses and Franchises

All Forms of Partnerships

Limited Liability Companies and Special Business Forms

Corporate Directors, Officers, and Shareholders

Mergers and Takeovers

Investor Protection, Insider Trading, and Corporate Governance

Administrative Agencies

Consumer Law

Environmental Protection

Antitrust Law

Professional Liability and Accountability

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Insurance

Wills and Trusts

The Legal Environment of Business

Torts and Crimes

Contracts and E-Contracts

Domestic and International Sales and Lease Contracts

Negotiable Instruments

Creditors Rights and Bankruptcy

Agency and Employment

Business Organizations

Government Regulation

Ruby Red Corporation is incorporated in South Carolina. In that state, Ruby Red is