Exam 39: Corporate Formation and Financing

A holding company is a company whose business activity consists of holding shares in another company.

Skyla and Terry want to form and do business as Unique Boutique Corporation.Most statutes governing the formation and use of corporations are guided by

Incredible eSales Corporation is a new Internet business.How can Incredible eSales obtain capi?tal to finance its operations?

Courts in some states will treat an alleged corporation as if it were an actual corporation for the purpose of determining the rights and liabilities in particular circumstances.

A court will not pierce the corporate veil of a corporation that is merely too "thinly" capitalized.

Corporate profits can be subject to double taxation.

Fact Pattern 39-1A (Questions A3-A4 apply) Mountaintop Clearview Corporation authorizes Niles,its employee,to oversee its timber operation.In the course of his employment,Niles disposes of the operation's waste illegally.Orson is a Mountaintop shareholder. -Refer to Fact Pattern 39-1A.With respect to Mountaintop and Niles,liability for this crime most likely rests with

Bylaws can conflict with the incorporation statute or the articles of incorporation.

Each incorporator must have an interest in the corporation.

Discount Factory Outlets,Inc.,issues bonds.Bonds

Firms are obligated to return a principal amount per share to each holder of common stock.

Boutique Corporation would like to change its corporate status to avoid in?come taxes at the corporate level.To qualify,the shareholders must not be

Stan incorporates his scientific products business as Tech Precision Supply,Inc.This firm could have perpetual existence in

Digitech is a foreign corporation,which means that Digitech

Omega Corporation makes and markets digital timers,clocks,and related products.Like other business corpo?rations,Omega issues securities to

Start-Up Corporation substantially complies with all conditions prece?dent to incorpo?ration.Start-Up has

An agreement between shareholders to restrict the transfer of a closely held corporation's stock is illegal.

Hailey and Ike hold the first organizational meeting of Java Kiosk Corporation.Probably the most important function of this meeting is

Mari buys 500 shares of common stock in National Livestock Traders,Inc.As a shareholder of record,Mari owns a proportionate interest in terms of

Quixotic Company claims to be a corporation but it is not.Rachel signs a con?tract with Quixotic that is not performed.In Rachel's suit against Quixotic,a court will likely recognize the firm as