Chapter 34 T/F – Flashcards
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A corporation has perpetual existence unless otherwise stated in its articles of incorporation.
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A corporation owned by one person is treated under the law as separate from that person.
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Once a shareholder sells the stock of the corporation, since the ownership of the corporation changes, a new corporation is formed.
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Title to corporate property belongs to the shareholders.
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A corporation is a creature of the state and may be formed only by substantial compliance with a state incorporation statute.
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Zeron Corporation is incorporated in the State of West Virginia. It now wants to open a retail outlet in Kentucky. Zeron must obtain a certificate qualifying it to do business in the State of Kentucky.
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A corporation is considered a citizen under the Fourteenth Amendment provision that, "No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States."
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Under the RMBCA, a pre-incorporation subscription may be revoked at any time without the consent of the subscribers.
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The Model Business Corporation Act is a state statute that, like the UCC, has been adopted by all of the states in the United States to make state incorporation statutes uniform throughout the United States.
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Promoters have a fiduciary relationship with the corporation.
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Under the Statutory Close Corporation Supplement to the MBCA, a close corporation must have bylaws on file with the Office of the Secretary of State or some other public office.
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A corporation is a domestic corporation in the state in which it is incorporated.
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Big Burger Co. sues Bakum Corporation for breach of contract for $1,000 of hamburger buns that were not delivered. Bakum may assert as a defense to payment that Big Burger is not a de jure corporation.
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"Piercing the corporate veil" will result in personal liability of shareholders.
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A promoter who enters a preincorporation contract in the name of the corporation usually remains liable on the contract even if the corporation adopts it.
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If an act is ultra vires, it is beyond the legal authority of the corporation.
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Under the RMBCA, a newly formed corporation need not hold an organizational meeting.
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Under the RMBCA, the bylaws may be amended and must be publicly filed with the articles of incorporation.
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The RMBCA has been adopted, in whole or in part, by most states.
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The modern approach follows the common law rule in holding that a corporation cannot commit a criminal act.
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A corporation is considered to be a person within the meaning of the Fifth Amendment protection against self-incrimination.
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Under Subchapter S of the Internal Revenue Code, a corporation's income is taxed only at the shareholder level.
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The doctrine of ultra vires is of more significance today than it has been in the past.
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A promoter is a person who takes the preliminary steps to organize a corporation.
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Under the Revised Act, the filing of the articles of incorporation by the Secretary of State is conclusive proof that the incorporators have satisfied all conditions precedent to incorporation so that a shareholder or creditor would be unable to challenge the existence of the corporation.
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A corporation has no constitutional protection against unreasonable searches and seizures.
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A preincorporation subscription is an offer to purchase capital stock in a corporation yet to be formed.
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In many states, the services of the incorporators are perfunctory and short-lived.
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Under the Revised Act, a corporation can act as an incorporator of another corporation.
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Estoppel may create a corporation.
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Bylaws are rules governing a corporation's internal management.
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Subchapter S is a section of the Model Business Corporation Act that provides special benefits for small corporations.
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The Internal Revenue Service allows taxation of certain corporations to be similar to that of partnerships.
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Carroll, Daniels, and Elmore organized their veterinary practice as a professional corporation. This organization of professionals will be treated as a partnership for liability purposes.
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The "corporate veil" is most likely to be pierced in the case of closely held corporations and in parent-subsidiary relationships.
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Modern incorporation statutes have adopted an intermediate position regarding the revocability of preincorporation subscriptions.
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The Revised Act provides that at least two persons need to act as incorporators, though more may do so.
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Shareholders do not have limited liability for corporate debts.
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Most states have special incorporation statutes governing nonprofit corporations.
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