Question 1

An S corporation cannot have more than 100 shareholders.

Accepted Answer

A) True 
 B)False

Question 2

A corporation that is incorporated in another country is known as a(n) ________.

Accepted Answer

A)  alien corporation 
B)  public corporation 
C)  domestic corporation 
D)  municipal corporation 
A)  alien corporation 
B)  public corporation 
C)  domestic corporation 
D)  municipal corporation

Question 3

Only 20 percent of the Fortune 500 companies are incorporated in Delaware.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is true of treasury shares?

Accepted Answer

A)  They cannot be issued by the corporation. 
B)  They cannot be voted by the corporation. 
C)  They are owned by shareholders. 
D)  They are only issued by governments. 
A)  They cannot be issued by the corporation. 
B)  They cannot be voted by the corporation. 
C)  They are owned by shareholders. 
D)  They are only issued by governments.

Question 5

Which of the following is true of an amendment of the articles of incorporation that does not affect the rights attached to shares?

Accepted Answer

A)  The shareholders need to propose a resolution of recommending such an amendment. 
B)  The shareholders need to provide vote of approval for the amendment. 
C)  The board of directors can approve the amendment without shareholder approval. 
D)  The amendment need not be filed with the secretary of state of the state of incorporation. 
A)  The shareholders need to propose a resolution of recommending such an amendment. 
B)  The shareholders need to provide vote of approval for the amendment. 
C)  The board of directors can approve the amendment without shareholder approval. 
D)  The amendment need not be filed with the secretary of state of the state of incorporation.

Question 6

Amendments to the articles of incorporation must be filed with the secretary of state of the state of incorporation.

Accepted Answer

A) True 
 B)False

Question 7

Stocks for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends are known as ________.

Accepted Answer

A)  cumulative preferred stocks 
B)  noncumulative preferred stocks 
C)  common stocks 
D)  participating preferred stocks 
A)  cumulative preferred stocks 
B)  noncumulative preferred stocks 
C)  common stocks 
D)  participating preferred stocks

Question 8

The shareholders of the corporation have the absolute right to amend bylaws.

Accepted Answer

A) True 
 B)False

Question 9

Secured bondholders can foreclose on collateral in the event of nonpayment of interest.

Accepted Answer

A) True 
 B)False

Question 10

The articles of incorporation must contain the name and address of every incorporator.

Accepted Answer

A) True 
 B)False

Question 11

Shareholders are liable for the debt and obligations of a corporation.

Accepted Answer

A) True 
 B)False

Question 12

An S corporation must pay federal income tax at the corporate level.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is true for a corporation's incorporation in a state?

Accepted Answer

A)  A corporation can incorporate in only one state. 
B)  A corporation can incorporate in all states where it conducts business. 
C)  Alien corporations can only incorporate in one state. 
D)  Foreign corporations can incorporate in more than one state. 
A)  A corporation can incorporate in only one state. 
B)  A corporation can incorporate in all states where it conducts business. 
C)  Alien corporations can only incorporate in one state. 
D)  Foreign corporations can incorporate in more than one state.

Question 14

A detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing a corporation are referred to as ________.

Accepted Answer

A)  ultra vires rules 
B)  articles of incorporation 
C)  bylaws 
D)  corporation codes 
A)  ultra vires rules 
B)  articles of incorporation 
C)  bylaws 
D)  corporation codes

Question 15

Which of the following is true of an S corporation?

Accepted Answer

A)  The corporation can have no more than 100 shareholders. 
B)  Only foreign corporations with more than 10 shareholders can be an S corporation. 
C)  They are taxed at the corporate level. 
D)  The corporation must be a member of an affiliated group of corporations. 
A)  The corporation can have no more than 100 shareholders. 
B)  Only foreign corporations with more than 10 shareholders can be an S corporation. 
C)  They are taxed at the corporate level. 
D)  The corporation must be a member of an affiliated group of corporations.

Question 16

Convertible preferred stock permits the preferred stockholders to convert their shares into common stock.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following acts is seen as conclusive proof for the existence of a corporation?

Accepted Answer

A)  creation of the promoter's contracts 
B)  filing the articles of incorporation 
C)  acquiring a domain name for the corporation 
D)  selecting a state for incorporation 
A)  creation of the promoter's contracts 
B)  filing the articles of incorporation 
C)  acquiring a domain name for the corporation 
D)  selecting a state for incorporation

Question 18

A panel of persons who are elected by the shareholders that make policy decisions concerning the operation of a corporation is known as the ________.

Accepted Answer

A)  legal aides 
B)  cartel 
C)  consortium 
D)  board of directors 
A)  legal aides 
B)  cartel 
C)  consortium 
D)  board of directors

Question 19

A(n) ________ is a fictitious legal entity that is created according to statutory requirements.

Accepted Answer

A)  corporation 
B)  cartel 
C)  outfit 
D)  conference 
A)  corporation 
B)  cartel 
C)  outfit 
D)  conference

Question 20

A corporation is a foreign corporation in states other than the one in which it is incorporated.

Accepted Answer

A) True 
 B)False

Exam 36: Corporate Formation and Financing

An S corporation cannot have more than 100 shareholders.

A corporation that is incorporated in another country is known as a(n) ________.

Only 20 percent of the Fortune 500 companies are incorporated in Delaware.

Which of the following is true of treasury shares?

Which of the following is true of an amendment of the articles of incorporation that does not affect the rights attached to shares?

Amendments to the articles of incorporation must be filed with the secretary of state of the state of incorporation.

Stocks for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends are known as ________.

The shareholders of the corporation have the absolute right to amend bylaws.

Secured bondholders can foreclose on collateral in the event of nonpayment of interest.

The articles of incorporation must contain the name and address of every incorporator.

Shareholders are liable for the debt and obligations of a corporation.

An S corporation must pay federal income tax at the corporate level.

Which of the following is true for a corporation's incorporation in a state?

A detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing a corporation are referred to as ________.

Which of the following is true of an S corporation?

Convertible preferred stock permits the preferred stockholders to convert their shares into common stock.

Which of the following acts is seen as conclusive proof for the existence of a corporation?

A panel of persons who are elected by the shareholders that make policy decisions concerning the operation of a corporation is known as the ________.

A(n) ________ is a fictitious legal entity that is created according to statutory requirements.

A corporation is a foreign corporation in states other than the one in which it is incorporated.

Legal Heritage and the Digital Age

Courts and Jurisdiction

Judicial, Alternative, and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Product and Strict Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crime

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

Digital Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, Defenses, and Discharge

Banking System and Electronic Financial Transactions

Credit, Mortgages, and Debtors Rights

Secured Transactions

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment, Worker Protection, and Immigration Law

Labor Law

Equal Opportunity in Employment

Small Business, Entrepreneurship, and General Partnerships

Limited Partnerships and Special Partnerships

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchise and Special Forms of Business

Investor Protection and E-Securities Transactions

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection

Antitrust Law and Unfair Trade Practices

Personal Property, Real Property, and Insurance

Real Property

Landlord-Tenant Law and Land Use Regulation

Insurance

Accountants Duties and Liability

Wills, Trusts, and Estates

Family Law

International and World Trade Law

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