question

A corporation by estoppel is based on fairness rather than strict legal rules

answer

True

question

A dejure corporation is recognized as a corporation despite a defect in incorporation

answer

True

question

A business corporation can be incorporated under either state law or federal law

answer

False

question

Sara decided to incorporate her business under the name Gomo, Inc. Before Gomo was incorporated, Sara signed a contract in the name of Gomo, Inc. to lease a store front. Sara did not tell the other party that Gomo was not yet formed. Sara is personally liable on the lease.

answer

True

question

Shyff decided to incorporate his business under the name of "Zamm" the Model Act requires that Shyff include one of the following words: corporation," "incorporated," "limited," or "company" or an abbreviation thereof.

answer

True

question

A corporation must always have a registered agent within the state of incorporation, even if the corporation does not maintain an office in that state

answer

True

question

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

answer

False

question

Incorporates of Maizey Co. signed and delivered the corporate charter to the proper office, but due to inefficiencies in the government office, the filing was delayed. During the period between the delivery of the charter and the filing, a promoter of Maizey Co. entered a contract for the delivery of goods using the corporate name. The supplier, if it finds out the filing had not been completed when the contract was entered, may hold the promoter personally liable on the contract.

answer

False

question

A corporation is not allowed to issue dividends to shareholders unless it is solvent

answer

True

question

Incorporates are required to sign the charter, deliver it to the proper state officials, and purchase a certain percentage of the initial stock offering

answer

False

question

It is illegal for shareholders to transfer their stock to a trust and give the trustee the power to vote the shares

answer

False

question

TriColor, Inc. is doing business in Minnesota, West Virginia, and Oklahoma. TriColor must register in all three of these states

answer

True

question

Owners of preferred stock typically have a preference in liquidation

answer

True

question

Lee owns 1,000 shares of common stock in TriColor, Inc. Common stock is the last stock in line for any corporate payouts, including dividends and liquidation payments

answer

True

question

Terminating a corporation is a three-step process: dissolution, winding up and termination

answer

False

question

Laurie is incorporating her business. The business's home state is Wisconsin. Business will be conducting in California, Michigan, Pennsylvania and Virginia. Lauire:

answer

Can incorporate the business in any state

question

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 space remodeled. Which statement is correct?

answer

yStar will be liable on the contracct only if the corporation adopts the contract

question

A corporate charter is filed with

answer

A states secretary of state office

question

MegaCorp purchased 10,000 shares of its own stock that had previously been owned by private investors. The stock MegaCorp repurchased is called:

answer

Treasury Stock

question

In Deleware, a person may reserve a corporate name

answer

for 120 days by paying a 75$ fee

question

In incorporating E-prise, the promoter game an incorrect ZIP code for the registered agent. All of the other requirements for the incorporation were met. E-prise is an

answer

dejure corporation

question

Preemptive rights are:

answer

Designed to prevent dilution of a shareholder's ownership in the company

question

Defining the corporation with such information as the corporation name, the number and type of authorized shares of stock, identification of the purpose and agent is done through the:

answer

All of the above. All of these items are used to identify the same document

question

Corporate stock can be divided into categories called ___ which can further be divided into ___

answer

Classes, series

question

Once a provision is in the corporate charter, it can only be changed by

answer

both of the above are necessary to change a corporate charter

question

Incorporation protects:

answer

Shareholders against personal liability for the debts of the company

question

The directors of MegaCorp learn that an outsider is planning on buying enough voting stock to get herself elected to the board of directors. MegaCorp, which has cumulative voting, quickly puts together a vote of shareholders to eliminate the company's cumulative voting procedure. The shareholders vote to do away with cumulative voting. The outsider, Dawn, who wanted to get herself elected to MegaCorp's board, claims that the company has committed an illegal act. Is she right?

answer

No. Under the model act, regardless of MegaCorps motives, it had the right to act as it did

question

Mike is planning on incorporating his business in the state of Deleware. The corporate name of Mike's business must be different from

answer

that of any corporation that already exists in Deleware

question

Fashion 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?

answer

None

question

Fashions, Inc. has 12 shareholders The company is subject to the Model Act. What officers is Fashions, Inc. required to have?

answer

Whatever officers are described in the corporate bylaws

question

The officers of a corporation are

answer

chosen by board of directors

question

Under most state statutes, a corporation may:

answer

include in its charter a provision indemnifying the directors unless they have engaged in misconduct or bad faith

question

Which of the following statements is correct?

answer

All the above

question

MegaCorp is incorporated under Deleware law. It is registered to do business in New York. Legally, in New York MegaCorp is known as what kind of corporation

answer

Foreign

question

MegaCorp occasionally sells products in Michigan. It does not have an office in that state and does not advertise in Michigan. The company's marketing representatives are based in New York but do travel to Michigan once a year to attend a trade show. Which statement is correct?

answer

MegaCorp is not required to register in Michigan because it does not have an ongoing presence in Michigan

question

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?

answer

Yes, MegaCorp can defend against a lawsuit in Michigan regardless of whether MegaCorp is registered to do business in the state

question

Hank owns 100 shares of cumulative preferred stock in Wayside Transport, Inc. Kelsey owns 50 non-cumulative preferred shares, and Oleg owns 120 shares of common stock. Wayside does not pay dividends in 2007. In 2009:

answer

All the above

question

What is meant by the term "piercing the corporate veil?"

answer

Corporate shareholders may be held personally liable to a person damaged by an act of the corporation

question

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

answer

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

question

Wizardry Corporation's purpose clause in its charter states, "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

answer

the ultra vires doctrine

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