Chapter 20 Test Flash Cards

question

MegaCorp purchased 10,000 shares of its own stock that had previously been owned by private investors. The stock MegaCorp repurchased is called:
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treasury stock
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The officers of a corporation are
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are elected by the board of directors
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Jenny is an officer of a corporation. She made a difficult business decision. When challenged about her decision, the court ruled she had acted in good faith and that the business judgment rule applied. As such
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Jenny will not be held personally liable for a decision that results in money losses to the company
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A corporation must obtain shareholder approval before the company
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all of the above
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MegaCorp is incorporated under Delaware law. It has its principal place of business in New York. Legally, in New York MegaCorp is known as what kind of corporation
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foreign
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Which of the following situations will allow a court to pierce the corporate veil?
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all of the above-Corporate shareholders may be personally liable to a person damaged by an act of the corporation
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Most business corporations are incorporated under federal, rather than state, law
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false
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Directors have the authority to manage the corporate business
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true
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What is meant by the term piercing the corporate veil
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Corporate shareholders may be personally liable to a person damaged by an act of the corporation
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Mike is planning on incorporating his business in the state of Delaware. The corporate name of Mike s business must be different from the name of:
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all of the above including any corp in delaware
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The Model Act requires that a corporation assign a par value to its stock
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false
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Under corporate law, a corporation that officially states its purpose as “to engage in any lawful activity for which corporations may be organized under the General Corporation law of Massachusetts” is too broad. A corporation’s purpose must be narrowly and specifically defined
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false
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Which of the following statements is correct
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all of the above– cants see the answers so not sure what this is refering to anymore 🙁
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The Articles of Incorporation of a corporation set out very specific, detailed procedures for the operation of the company, such as who is required to sign checks, who is in charge of hiring employees, and where the annual meeting will be held
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false
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Who establishes executive compensation
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the board of directors
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Shorry decided to incorporate his business under the name of Zamm. In addition to Zamm, the Model Act requires that Shorry include one of the following words in the business name: corporation, incorporated, limited, or company
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True
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A director who has engaged in self-dealing has violated the duty of loyalty to the corporation
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true
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A corporation must always have an official address within the state of incorporation. If the corporation does not maintain an office in that state, the corporation may hire a registered agent
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true
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Carey decided to incorporate her business under the name Y-Star Inc. Before Y-Star was incorporated, Carey signed a contract in the name of Y-Star, Inc. to have some office space remodeled. Y-Star
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will be liable on the contract only if the corporation adopts the contract
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A corporate charter is filed with:
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a state s Secretary of State office
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For the business judgment rule to apply
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all of the above, cant see other answers
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It is the normal practice for a corporation to hold an annual meeting of its shareholders; and if the corporation’s stock is traded on the New York Stock Exchange, it must do so
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true
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Laurie is incorporating her business. The business s home state is Wisconsin. Business will be conducted in California, Michigan, Pennsylvania, and Virginia. Laurie
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can incorporate the business in any state
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Fashions, Inc. has 12 shareholders. The company is subject to the Model Act. What officers is Fashions, Inc. required to have
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Whatever officers are described in the bylaws. The Model Act is flexible.
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Fashions, Inc. has 60 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
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one

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