Question 1

Which of the following is NOT a characteristic of the corporate form of doing business?

Accepted Answer

A) Limited liability. 
B) Perpetual existence. 
C) Informal organization. 
D) Transferability of corporate shares. 
A) Limited liability. 
B) Perpetual existence. 
C) Informal organization. 
D) Transferability of corporate shares.

Question 2

Name the classifications of corporations.

Accepted Answer

Corporations may be classified

Question 3

Which of the following may influence a promoter to choose to incorporate in a particular state?

Accepted Answer

A) Corporate laws. 
B) Its tax on corporate earnings. 
C) The state court system. 
D) All of the above. 
A) Corporate laws. 
B) Its tax on corporate earnings. 
C) The state court system. 
D) All of the above.

Question 4

Zeron Corporation is incorporated in the State of West Virginia.It now wants to open a retail outlet in Kentucky.Zeron must obtain a certificate of authority allowing it to do business in Kentucky.

Accepted Answer

A) True 
 B)False

Question 5

A corporation is a creature of the state and may be formed only by substantial compliance with a state incorporation statute.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is the basic governing document of a corporation?

Accepted Answer

A) A subscription. 
B) A charter, after filing. 
C) The set of bylaws. 
D) A certificate of authority. 
A) A subscription. 
B) A charter, after filing. 
C) The set of bylaws. 
D) A certificate of authority.

Question 7

The president of Hi-Glow Cosmetics sends his top chemist to Hi-Glow's competitor's labs to steal its formula for shiny lipstick.The chemist gets caught and is sent to jail.Can Hi-Glow be found to be criminally liable?

Accepted Answer

A) Yes, under the doctrine of ultra vires. 
B) Yes, since the president authorized the crime. 
C) No, because a corporation cannot go to jail. 
D) Both (a) and (b). 
A) Yes, under the doctrine of ultra vires. 
B) Yes, since the president authorized the crime. 
C) No, because a corporation cannot go to jail. 
D) Both (a) and (b).

Question 8

If an act is ultra vires, it is beyond the legal authority of the corporation.

Accepted Answer

A) True 
 B)False

Question 9

Under the Revised Act, a corporation can act as an incorporator of another corporation.

Accepted Answer

A) True 
 B)False

Question 10

Promoters have a fiduciary relationship with the corporation.

Accepted Answer

A) True 
 B)False

Question 11

Define "promoter" in reference to a corporation.

Accepted Answer

A promoter is a person who brings about

Question 12

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 13

What statutory powers does a corporation normally possess?

Accepted Answer

The powers granted by incorporation stat

Question 14

Title to corporate property belongs to the shareholders.

Accepted Answer

A) True 
 B)False

Question 15

The incorporators would typically do which of the following?

Accepted Answer

A) Purchase the outstanding shares. 
B) Assemble the assets. 
C) Sign the charter. 
D) Prepare the incorporation papers. 
A) Purchase the outstanding shares. 
B) Assemble the assets. 
C) Sign the charter. 
D) Prepare the incorporation papers.

Question 16

A corporation has perpetual existence unless otherwise stated in its articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Under Subchapter S of the Internal Revenue Code, a corporation's income is taxed only at the shareholder level.

Accepted Answer

A) True 
 B)False

Question 19

Shares in a corporation are freely transferable by sale, gift, or pledge unless a contract restricts the transfer.

Accepted Answer

A) True 
 B)False

Question 20

A corporation is considered to be a person within the meaning of the Fifth Amendment protection against self-incrimination.

Accepted Answer

A) True 
 B)False

Exam 34: Nature and Formation of Corporations

Which of the following is NOT a characteristic of the corporate form of doing business?

Name the classifications of corporations.

Which of the following may influence a promoter to choose to incorporate in a particular state?

Zeron Corporation is incorporated in the State of West Virginia.It now wants to open a retail outlet in Kentucky.Zeron must obtain a certificate of authority allowing it to do business in Kentucky.

A corporation is a creature of the state and may be formed only by substantial compliance with a state incorporation statute.

Which of the following is the basic governing document of a corporation?

The president of Hi-Glow Cosmetics sends his top chemist to Hi-Glow's competitor's labs to steal its formula for shiny lipstick.The chemist gets caught and is sent to jail.Can Hi-Glow be found to be criminally liable?

If an act is ultra vires, it is beyond the legal authority of the corporation.

Under the Revised Act, a corporation can act as an incorporator of another corporation.

Promoters have a fiduciary relationship with the corporation.

Define "promoter" in reference to a corporation.

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

What statutory powers does a corporation normally possess?

Title to corporate property belongs to the shareholders.

The incorporators would typically do which of the following?

A corporation has perpetual existence unless otherwise stated in its articles of incorporation.

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.

Under Subchapter S of the Internal Revenue Code, a corporation's income is taxed only at the shareholder level.

Shares in a corporation are freely transferable by sale, gift, or pledge unless a contract restricts the transfer.

A corporation is considered to be a person within the meaning of the Fifth Amendment protection against self-incrimination.

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

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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