Exam 5: Corporate Formation and Financing

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

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 corporation cannot be formed for purposes other than making a profit.

Rita and Susan want to form and do business as Trips & Travel, Inc. They will serve as the firm's directors and officers, and will initially hold all of the stock in the company. A corporation is owned by

Interstate Paving, Inc., issues bonds. Bonds​

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

Stocks represent the borrowing of funds by firms.

The board of directors makes corporate policy decisions.

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

Equestrian Stables Corporation's articles list an incorrect address for its incorporator. Under this circumstance, Equestrian Stables is most likely

A publicly held corporation is any corporation whose shares are publicly traded in a securities market.

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