Question 1

A state law regulating the activities of a foreign corporation does not unduly burden interstate commerce if:

Accepted Answer

A) the law serves both the state's and the foreign corporation's legitimate interest. 
B) the foreign corporation has chosen the least burdensome means of promoting that interest. 
C) the legitimate state interest outweighs the statute's burden on interstate commerce. 
D) a foreign corporation enters interstate commerce to do intrastate business in a state. 
A) the law serves both the state's and the foreign corporation's legitimate interest. 
B) the foreign corporation has chosen the least burdensome means of promoting that interest. 
C) the legitimate state interest outweighs the statute's burden on interstate commerce. 
D) a foreign corporation enters interstate commerce to do intrastate business in a state.

Question 2

Most of the common law of corporations deals with:

Accepted Answer

A) creditor and shareholder rights. 
B) incorporation of not-for-profit organizations. 
C) promoter and manager rights. 
D) incorporation of sole proprietorships. 
A) creditor and shareholder rights. 
B) incorporation of not-for-profit organizations. 
C) promoter and manager rights. 
D) incorporation of sole proprietorships.

Question 3

A corporation that is incorporated in one country that is doing business in another country is called a(n):

Accepted Answer

A) international;corporation 
B) domestic corporation 
C) foreign corporation 
D) alien corporation 
A) international;corporation 
B) domestic corporation 
C) foreign corporation 
D) alien corporation

Question 4

The U.S.Constitution gives the federal government the power to regulate business activity that occurs across state lines.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following activities is classified as doing business for the purpose of intrastate business qualification?

Accepted Answer

A) Owning or using real estate for general corporate purposes. 
B) Soliciting orders by mail that require acceptance outside the state. 
C) Selling products or services through independent contractors. 
D) Conducting an isolated transaction that is completed within 30 days. 
A) Owning or using real estate for general corporate purposes. 
B) Soliciting orders by mail that require acceptance outside the state. 
C) Selling products or services through independent contractors. 
D) Conducting an isolated transaction that is completed within 30 days.

Question 6

Which of the following state tax scenarios violates the commerce clause?

Accepted Answer

A) The tax is slightly related to the services provided by the state. 
B) The tax is applied to an activity with a substantial connection with the taxing state. 
C) The tax is fairly apportioned. 
D) The tax does not discriminate against interstate commerce. 
A) The tax is slightly related to the services provided by the state. 
B) The tax is applied to an activity with a substantial connection with the taxing state. 
C) The tax is fairly apportioned. 
D) The tax does not discriminate against interstate commerce.

Question 7

The purpose behind the Model Business Corporation Act is to exploit the maximum potential of workers in a corporation.

Accepted Answer

A) True 
 B)False

Question 8

Nearly all corporations whose veils are pierced are:

Accepted Answer

A) close corporations. 
B) government-owned corporations. 
C) publicly held corporations. 
D) nonprofit corporations. 
A) close corporations. 
B) government-owned corporations. 
C) publicly held corporations. 
D) nonprofit corporations.

Question 9

In which of the following situations will a business incorporated in Ohio be required to qualify to do business in Kentucky?

Accepted Answer

A) The business maintains a stock of goods in Kentucky from which it sells to customers in Kentucky. 
B) The business owns a building in Kentucky,which it holds for investment. 
C) The business sends a sales agent to Kentucky to solicit orders from customers in Kentucky,while orders are brought back to and accepted in Ohio. 
D) The business sells its goods to customers in Kentucky through independent distributors located in Kentucky. 
A) The business maintains a stock of goods in Kentucky from which it sells to customers in Kentucky. 
B) The business owns a building in Kentucky,which it holds for investment. 
C) The business sends a sales agent to Kentucky to solicit orders from customers in Kentucky,while orders are brought back to and accepted in Ohio. 
D) The business sells its goods to customers in Kentucky through independent distributors located in Kentucky.

Question 10

A corporation with a reasonable debt-to-equity ratio will not have its corporate veil pierced on the grounds of thin capitalization.

Accepted Answer

A) True 
 B)False

Question 11

During the early period of American history,the state governments issued special charters that created corporations.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following corporation classes' profits are taxed only at the shareholder level?

Accepted Answer

A) An S corporation 
B) For-profit corporation 
C) Not-for-profit corporation 
D) Publicly held corporation 
A) An S corporation 
B) For-profit corporation 
C) Not-for-profit corporation 
D) Publicly held corporation

Question 13

Under the general incorporation law,the minimum number of owners a business needs to be incorporated as a for-profit corporation is:

Accepted Answer

A) 10. 
B) 5. 
C) 1. 
D) 20. 
A) 10. 
B) 5. 
C) 1. 
D) 20.

Question 14

The Model Business Corporation Act (MBCA)was prepared and authorized by the:

Accepted Answer

A) federal government. 
B) state governments,acting together. 
C) state governments,acting separately. 
D) American Bar Association's Committee on Corporate Laws. 
A) federal government. 
B) state governments,acting together. 
C) state governments,acting separately. 
D) American Bar Association's Committee on Corporate Laws.

Question 15

The maximum number of shareholders that are allowed in a Subchapter S corporation is:

Accepted Answer

A) 50. 
B) 75. 
C) 100. 
D) 500. 
A) 50. 
B) 75. 
C) 100. 
D) 500.

Question 16

When shareholder-managers pay themselves excessively high salaries or have the corporation pay their personal credit card bills,this is an example of:

Accepted Answer

A) circumventing a statute. 
B) looting. 
C) creditor domination. 
D) thin capitalization. 
A) circumventing a statute. 
B) looting. 
C) creditor domination. 
D) thin capitalization.

Question 17

Which of the following is correct about the history of corporations?

Accepted Answer

A) In the late 18th century,general incorporation statutes emerged in the United States. 
B) From the 18th century onward,France started giving privileges of incorporation to mercantile ventures. 
C) Early American corporations received special privileges from state legislatures. 
D) In England,the corporate form was used extensively after the 16th century. 
A) In the late 18th century,general incorporation statutes emerged in the United States. 
B) From the 18th century onward,France started giving privileges of incorporation to mercantile ventures. 
C) Early American corporations received special privileges from state legislatures. 
D) In England,the corporate form was used extensively after the 16th century.

Question 18

Incorporation of a nonprofit corporation under state law requires delivering its ________ to the secretary of state.

Accepted Answer

A) articles of incorporation 
B) bylaws 
C) meeting minutes 
D) certificate of nonprofit 
A) articles of incorporation 
B) bylaws 
C) meeting minutes 
D) certificate of nonprofit

Question 19

Which of the following statements is true of not-for-profit corporations?

Accepted Answer

A) They provide services to their members. 
B) They must distribute all of their surplus revenues to their shareholders. 
C) They must distribute all of their excess revenues to charities. 
D) They issue stocks only to their owners. 
A) They provide services to their members. 
B) They must distribute all of their surplus revenues to their shareholders. 
C) They must distribute all of their excess revenues to charities. 
D) They issue stocks only to their owners.

Question 20

All states require lawyers who wish to incorporate to incorporate under:

Accepted Answer

A) general incorporation law. 
B) professional corporation acts. 
C) special professional charter. 
D) common corporate law. 
A) general incorporation law. 
B) professional corporation acts. 
C) special professional charter. 
D) common corporate law.

Exam 41: History and Nature of Corporations

A state law regulating the activities of a foreign corporation does not unduly burden interstate commerce if:

Most of the common law of corporations deals with:

A corporation that is incorporated in one country that is doing business in another country is called a(n):

The U.S.Constitution gives the federal government the power to regulate business activity that occurs across state lines.

Which of the following activities is classified as doing business for the purpose of intrastate business qualification?

Which of the following state tax scenarios violates the commerce clause?

The purpose behind the Model Business Corporation Act is to exploit the maximum potential of workers in a corporation.

Nearly all corporations whose veils are pierced are:

In which of the following situations will a business incorporated in Ohio be required to qualify to do business in Kentucky?

A corporation with a reasonable debt-to-equity ratio will not have its corporate veil pierced on the grounds of thin capitalization.

During the early period of American history,the state governments issued special charters that created corporations.

Which of the following corporation classes' profits are taxed only at the shareholder level?

Under the general incorporation law,the minimum number of owners a business needs to be incorporated as a for-profit corporation is:

The Model Business Corporation Act (MBCA)was prepared and authorized by the:

The maximum number of shareholders that are allowed in a Subchapter S corporation is:

When shareholder-managers pay themselves excessively high salaries or have the corporation pay their personal credit card bills,this is an example of:

Which of the following is correct about the history of corporations?

Incorporation of a nonprofit corporation under state law requires delivering its ________ to the secretary of state.

Which of the following statements is true of not-for-profit corporations?

All states require lawyers who wish to incorporate to incorporate under:

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

Filters