Question 1

Conversion rights

Accepted Answer

A) specify the order in which classes of stockholders are paid upon dissolution. 
B) are designed to prevent dilution of a shareholder's ownership in the company. 
C) allow investors to convert to a different class. 
D) establish whether shareholders are entitled to dividends. 
A) specify the order in which classes of stockholders are paid upon dissolution. 
B) are designed to prevent dilution of a shareholder's ownership in the company. 
C) allow investors to convert to a different class. 
D) establish whether shareholders are entitled to dividends.

Question 2

MegaCorp is incorporated in the state of Delaware and is registered only in Delaware.Jolene purchased a MegaCorp product from a company's sales representative following a presentation in Michigan.Jolene was seriously injured by the product in Michigan.Under the Model Act,if Jolene sues in Michigan,can MegaCorp defend the suit there?

Accepted Answer

A) MegaCorp may only defend against a lawsuit in Michigan if it first registers by paying back fees,taxes,and penalties. 
B) Yes,MegaCorp can bring or defend against a lawsuit in any state regardless of whether the corporation is registered to do business in that state. 
C) Yes,MegaCorp can defend against a lawsuit in Michigan regardless of whether MegaCorp is registered to do business in that state. 
D) No.Jolene must sue,and MegaCorp may defend a lawsuit only in Delaware. 
A) MegaCorp may only defend against a lawsuit in Michigan if it first registers by paying back fees,taxes,and penalties. 
B) Yes,MegaCorp can bring or defend against a lawsuit in any state regardless of whether the corporation is registered to do business in that state. 
C) Yes,MegaCorp can defend against a lawsuit in Michigan regardless of whether MegaCorp is registered to do business in that state. 
D) No.Jolene must sue,and MegaCorp may defend a lawsuit only in Delaware.

Question 3

Corporate stock can be divided into categories called ________,which can be further divided into ________.

Accepted Answer

A) authorized shares,classes 
B) classes,series 
C) equity,assets 
D) debentures,classes 
A) authorized shares,classes 
B) classes,series 
C) equity,assets 
D) debentures,classes

Question 4

Who signs the charter and files it with the secretary of state?

Accepted Answer

A) the incorporator 
B) the chairman of the board 
C) the promotor 
D) the company president 
A) the incorporator 
B) the chairman of the board 
C) the promotor 
D) the company president

Question 5

A corporation must have a registered agent within the state of incorporation only if the corporation maintains an office in that state.

Accepted Answer

A) True 
 B)False

Question 6

A corporation officially states its purpose is "to engage in any lawful activity for which corporations may be organized under the General Corporation Law of Idaho." Under corporate law,this purpose is too broad.A corporation's purpose must be more narrowly defined.

Accepted Answer

A) True 
 B)False

Question 7

Fashions,Inc.has 12 shareholders.There is no shareholder agreement concerning the board of directors.The company is subject to the Model Act.How many directors is Fashions,Inc.required to have?

Accepted Answer

A) none 
B) one 
C) two 
D) five 
A) none 
B) one 
C) two 
D) five

Question 8

The lawyer who forms the corporation cannot legally serve as its incorporator.

Accepted Answer

A) True 
 B)False

Question 9

A corporation is required to have at least one director,no matter how many shareholders it has.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following states that a corporation cannot undertake any transaction unless its charter permits it?

Accepted Answer

A) the ultra vires doctrine 
B) the estoppel doctrine 
C) the exculpatory clause 
D) the indemnification clause 
A) the ultra vires doctrine 
B) the estoppel doctrine 
C) the exculpatory clause 
D) the indemnification clause

Question 11

Carey decided to incorporate her business under the name yStar Inc.Before yStar was incorporated,Carey signed a contract in the name of yStar,Inc.to have some office space remodeled.Which statement is correct?

Accepted Answer

A) yStar is liable on the contract because the contract was signed in its name. 
B) yStar becomes liable on the contract as soon as it is incorporated. 
C) yStar is liable on the contract if the contractor knows that the corporation does not yet exist. 
D) yStar will be liable on the contract only if the corporation adopts the contract. 
A) yStar is liable on the contract because the contract was signed in its name. 
B) yStar becomes liable on the contract as soon as it is incorporated. 
C) yStar is liable on the contract if the contractor knows that the corporation does not yet exist. 
D) yStar will be liable on the contract only if the corporation adopts the contract.

Question 12

What are some of the advantages for a business to incorporate in Delaware?

Accepted Answer

Delaware offers corporations several adv

Question 13

In incorporating E-prise,the promoter gave an incorrect ZIP Code for the registered agent.All of the other requirements for incorporation were met.E-prise is a(n)

Accepted Answer

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

Question 14

Under the Model Act,a corporation must have at least one director unless all shareholders agree to eliminate the board or the corporation has fewer than _____ shareholders.

Accepted Answer

A) 10 
B) 25 
C) 50 
D) 100 
A) 10 
B) 25 
C) 50 
D) 100

Question 15

Wizardry Corporation's purpose clause in its charter states the following: "To operate a home-cleaning service business." After a few years of successful operation,Wizardry is offered the challenge of landscaping a neighboring business.If Wizardry accepts the offer,it would be violating its charter under

Accepted Answer

A) the de jure doctrine. 
B) the de facto doctrine. 
C) the ultra vires doctrine. 
D) an estoppel theory. 
A) the de jure doctrine. 
B) the de facto doctrine. 
C) the ultra vires doctrine. 
D) an estoppel theory.

Question 16

Zach decides to incorporate his business under the name of "Zamm." In addition to "Zamm," the Model Act requires that Zach include one of the following words: "corporation," "incorporated," "limited," or "company."

Accepted Answer

A) True 
 B)False

Question 17

The executives of Jornaginn Corporation have decided they need to sell 50,000 additional shares of stock to finance their expansion plans.The executives

Accepted Answer

A) cannot sell that many shares unless they were authorized initially in the corporate charter. 
B) can sell as many shares as the market will bear. 
C) are limited by the number of shares authorized in the corporate charter,but this number can be increased by amending the charter and paying a fee. 
D) can sell the shares only if the shares have a par value which is close to the current market price. 
A) cannot sell that many shares unless they were authorized initially in the corporate charter. 
B) can sell as many shares as the market will bear. 
C) are limited by the number of shares authorized in the corporate charter,but this number can be increased by amending the charter and paying a fee. 
D) can sell the shares only if the shares have a par value which is close to the current market price.

Question 18

Denise is a promoter for a proposed corporation,EVR-Young Corp.As promoter,she signed a three-year lease to rent office space in an office park.She signed her name and indicated below her signature that she was signing as "promoter for EVR-Young Corp. ,a company yet to be incorporated."
EVR-Young is never incorporated.The lessor believes that Denise is personally liable for any damages it will sustain as a result of the three-year lease having to be breached.Is Denise personally liable?

Accepted Answer

Since Denise signed the contract as a pr

Question 19

What is the first step that must be taken to terminate a corporation?

Accepted Answer

A) filing 
B) vote 
C) revocation 
D) winding up 
A) filing 
B) vote 
C) revocation 
D) winding up

Question 20

What term identifies stock that has been authorized and sold?

Accepted Answer

A) authorized and paid stock 
B) outstanding stock 
C) treasury stock 
D) authorized and unissued stock 
A) authorized and paid stock 
B) outstanding stock 
C) treasury stock 
D) authorized and unissued stock

Exam 33: Life and Death of a Corporation

Conversion rights

Corporate stock can be divided into categories called ________,which can be further divided into ________.

Who signs the charter and files it with the secretary of state?

A corporation must have a registered agent within the state of incorporation only if the corporation maintains an office in that state.

A corporation officially states its purpose is "to engage in any lawful activity for which corporations may be organized under the General Corporation Law of Idaho." Under corporate law,this purpose is too broad.A corporation's purpose must be more narrowly defined.

Fashions,Inc.has 12 shareholders.There is no shareholder agreement concerning the board of directors.The company is subject to the Model Act.How many directors is Fashions,Inc.required to have?

The lawyer who forms the corporation cannot legally serve as its incorporator.

A corporation is required to have at least one director,no matter how many shareholders it has.

Which of the following states that a corporation cannot undertake any transaction unless its charter permits it?

Carey decided to incorporate her business under the name yStar Inc.Before yStar was incorporated,Carey signed a contract in the name of yStar,Inc.to have some office space remodeled.Which statement is correct?

What are some of the advantages for a business to incorporate in Delaware?

In incorporating E-prise,the promoter gave an incorrect ZIP Code for the registered agent.All of the other requirements for incorporation were met.E-prise is a(n)

Under the Model Act,a corporation must have at least one director unless all shareholders agree to eliminate the board or the corporation has fewer than _____ shareholders.

Zach decides to incorporate his business under the name of "Zamm." In addition to "Zamm," the Model Act requires that Zach include one of the following words: "corporation," "incorporated," "limited," or "company."

The executives of Jornaginn Corporation have decided they need to sell 50,000 additional shares of stock to finance their expansion plans.The executives

What is the first step that must be taken to terminate a corporation?

What term identifies stock that has been authorized and sold?

Introduction to Law

Ethics and Corporate Social Responsibility

International Law

Common Law, Statutory Law, and Administrative Law

Constitutional Law

Dispute Resolution

Crime

Intentional Torts and Business Torts

Negligence, Strict Liability, and Product Liability

Privacy and Internet Law

Introduction to Contracts

Agreement: Offers and Acceptances

Consideration

Legality

Voidable Contracts: Capacity and Consent

Written Contracts

Third Parties

Contract Termination

Remedies

Practical Contracts

Introduction to Sales

Ownership, Risk and Warranties

Performance and Remedies

Secured Transactions

Creating a Negotiable Instrument

Liability for Negotiable Instruments

Accountants Liability

Agency Law

Employment and Labor Law

Employment Discrimination

Starting a Business: Llcs and Other Options

Partnerships

Management Duties

Shareholder Rights

Bankruptcy

Securities Regulation

Antitrust

Consumer Protection

Environmental Law

Intellectual Property

Real Property and Landlord Tenant Law

Personal Property and Bailment

Planning for the Future: Wills, Trusts and Insurance

Filters

Corporate stock can be divided into categories called ,which can be further divided into .