Question 1

Under the Model Business Corporation Act,a shareholder may ask a court to dissolve a corporation when:

Accepted Answer

A)  a corporation uses assets for public welfare. 
B)  directors are in conflict, their deadlock cannot be broken by shareholders, and the corporation faces ruin. 
C)  directors are maintaining registered agents without the approval of the shareholders. 
D)  creditors are acting unfairly or illegally. 
A)  a corporation uses assets for public welfare. 
B)  directors are in conflict, their deadlock cannot be broken by shareholders, and the corporation faces ruin. 
C)  directors are maintaining registered agents without the approval of the shareholders. 
D)  creditors are acting unfairly or illegally.

Question 2

Which of the following is a common trait of close corporations?

Accepted Answer

A)  The shareholders are large in number. 
B)  Shareholders usually live in different geographic areas. 
C)  Only few of the shareholders are active in the business. 
D)  There is no established market for the stock. 
A)  The shareholders are large in number. 
B)  Shareholders usually live in different geographic areas. 
C)  Only few of the shareholders are active in the business. 
D)  There is no established market for the stock.

Question 3

Which of the following would be a justification for involuntary dissolution of a corporation by a creditor?

Accepted Answer

A)  When there is misapplication or waste of corporate assets 
B)  When directors are in conflict, deadlock cannot be broken by shareholders, and the corporation faces ruin 
C)  When corporation is insolvent and not paying its debts 
D)  When directors are acting illegally or unfairly 
A)  When there is misapplication or waste of corporate assets 
B)  When directors are in conflict, deadlock cannot be broken by shareholders, and the corporation faces ruin 
C)  When corporation is insolvent and not paying its debts 
D)  When directors are acting illegally or unfairly

Question 4

Which of the following states has traditionally been considered attractive for incorporation?

Accepted Answer

A)  Delaware 
B)  New York 
C)  California 
D)  Iowa 
A)  Delaware 
B)  New York 
C)  California 
D)  Iowa

Question 5

The traditional judicial rule is that the court will pierce the veil whenever domination of a corporation by one or more of its shareholders is met,even if it does not result in an improper purpose.

Accepted Answer

A) True 
 B)False

Question 6

Mention the requirements that are essential for a court to pierce the veil of a corporation.

Accepted Answer

Under the traditional judicial rule,a co

Question 7

Under the revised Model Business Corporation Act (MBCA),if there are business debts following a defective incorporation,liability for the debts will be imposed upon:

Accepted Answer

A)  all purported shareholders who acted as if a corporation had been formed. 
B)  shareholders and others who took no active part in the defectively formed corporation. 
C)  shareholders, promoters, managers, directors, and others who mistakenly believe that the corporation is in existence. 
D)  promoters, managers, and shareholders who participated in management and policy decisions, and also knew of the defective incorporation. 
A)  all purported shareholders who acted as if a corporation had been formed. 
B)  shareholders and others who took no active part in the defectively formed corporation. 
C)  shareholders, promoters, managers, directors, and others who mistakenly believe that the corporation is in existence. 
D)  promoters, managers, and shareholders who participated in management and policy decisions, and also knew of the defective incorporation.

Question 8

A municipal corporation:

Accepted Answer

A)  is formed and operated by private persons. 
B)  does not seek to make a profit. 
C)  does not have the power to tax. 
D)  is incorporated under special statute. 
A)  is formed and operated by private persons. 
B)  does not seek to make a profit. 
C)  does not have the power to tax. 
D)  is incorporated under special statute.

Question 9

Why might a U.S.investor choose to incorporate its business in the country where it is conducting its overseas operations? What special constraints might exist?

Accepted Answer

In many circumstances,a U.S.investor wil

Question 10

Massachusetts courts require that the parties expressly create a(n)_____ before a corporation can be held liable for preincorporation contracts.

Accepted Answer

A)  adoption agreement 
B)  novation 
C)  incorporation regulation 
D)  operating agreement 
A)  adoption agreement 
B)  novation 
C)  incorporation regulation 
D)  operating agreement

Exam 28: Formation and Termination of Corporations

Under the Model Business Corporation Act,a shareholder may ask a court to dissolve a corporation when:

Which of the following is a common trait of close corporations?

Which of the following would be a justification for involuntary dissolution of a corporation by a creditor?

Which of the following states has traditionally been considered attractive for incorporation?

The traditional judicial rule is that the court will pierce the veil whenever domination of a corporation by one or more of its shareholders is met,even if it does not result in an improper purpose.

Mention the requirements that are essential for a court to pierce the veil of a corporation.

Under the revised Model Business Corporation Act (MBCA),if there are business debts following a defective incorporation,liability for the debts will be imposed upon:

A municipal corporation:

Why might a U.S.investor choose to incorporate its business in the country where it is conducting its overseas operations? What special constraints might exist?

Massachusetts courts require that the parties expressly create a(n)_____ before a corporation can be held liable for preincorporation contracts.

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Partnerships

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Introduction to Security

Security Interests in Personal Property

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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