Q&A Hero

Business Law

Q: If a corporation has fewer than _____ shareholders, the Revised Model Business Corporation Act allows companies to eliminate the board of directors entirely. A. 100 B. 50 C. 30 D. 25 E. None of these because the Revised Model Business Corporation does not allow companies to eliminate the board of directors entirely
Q: How are directors chosen during incorporation? A. Either the incorporators appoint them or the corporate articles name them. B. Either the incorporators appoint them or by a majority vote of the shareholders. C. Only by the incorporators appointing them. D. Only by the corporate articles naming them. E. Only by the president appointing them.
Q: How is the number of corporate directors determined? A. In the discretion of the president of the corporation B. By vote of the stockholders in compliance with state law C. According to the corporate articles or bylaws in compliance with state law D. According to the number of shares issued E. According to the amount of profit projected by incorporators for the first year
Q: Owners of _______________ enjoy preferences with respect to assets and dividends. A. acknowledged B. complex C. simple D. preferred E. common
Q: Owners of ___________________________ own a portion of a corporation but do not enjoy any preferences. A. acknowledged B. complex C. simple D. preferred E. common
Q: How are directors chosen after incorporation? A. By majority vote of the shareholders. B. By majority vote of all officers. C. By a two-thirds vote of shareholders. D. The president appoints them in his or her discretion. E. By a unanimous vote of the shareholders.
Q: In order to prevent a defective corporation from escaping corporate responsibility a court may hold that the entity is a(n) ______. A. corporation in fact B. unrealized corporation C. corporation by estoppel D. corporation by reservation E. partnership liability
Q: Which of the following types of securities represent loans to a corporation? A. Debt B. Equity C. Finance D. Formal E. Certified
Q: Which of the following types of securities represent ownership in a corporation? A. Debt B. Equity C. Finance D. Formal E. Certified
Q: Which of the following is another name for debt securities? A. Stocks B. Bonds C. Certificates of deposit D. Stocks, bonds, and certificates of deposit E. Stocks and bonds, but not certificates of deposit
Q: Corporate ______ are rules and regulations that govern the corporation's internal management. A. bylaws B. requirements C. statutes D. authorizations E. prohibitions
Q: If the incorporator or promoters make an error or omission during the incorporation process, courts may rule that the organization is not a corporation, in which case the organization is a(n) ______ corporation. A. illegal B. defunct C. uncertified D. defective E. expelled
Q: Which of the following is a corporation that has not substantially met the requirements of the state incorporation statute, but courts recognize it as a corporation for most purposes to avoid unfairness to third parties who believed it was properly incorporated? A. A de jure corporation B. A de facto corporation C. A corporation by estoppel D. A corporation by reservation E. None of these because an alleged corporation that has not substantially complied with state requirements for incorporation is not considered a corporation at all although it may be considered a partnership in order to protect innocent parties
Q: _____________________ provides basic information about the corporation in the corporate formation process. A. The articles of subscription B. The agreement to promote C. The agreement to subscribe D. The agreement to incorporate E. The articles of incorporation
Q: According to the Revised Model Business Corporation Act, which of the following should articles of incorporation include? A. The name of the corporation B. The name of the registered agent C. The names and addresses of the incorporators D. The name of the corporation, the name of the registered agent, and the names and addresses of the incorporators E. The name of the corporation and the registered agent, but not the names and addresses of the incorporators
Q: When a corporation is incorporated, the secretary of state usually issues a(n) ______, a document certifying that the corporation is incorporated in the state and is authorized to conduct business. A. approval of incorporation B. certificate of incorporation C. authorization of incorporation D. certification of incorporation E. chronicle of incorporation
Q: _____ is an individual who applies to the state for incorporation on behalf of a corporation. A. A promoter B. An incorporator C. A facilitator D. An obtainer E. A certification analyst
Q: Which of the following is needed in order for a business to qualify as an S corporation? A. No more than 100 shareholders B. Only individuals, trusts, and in some circumstances corporations as shareholders C. At least $10,000 in capital D. No more than 100 shareholders; only individuals, trusts, and in some circumstances corporations as shareholders, and at least $10,000 in capital E. No more than 100 shareholders and only individuals, trusts, and in some circumstances corporations as shareholders; but there is no requirement of at least $10,000 in capital
Q: A(n) _____ begins the corporation creation and organization process by arranging capital, financing, and licenses. A. subscriber B. incorporator C. promoter D. officer E. shareholder
Q: Which of the following is acceptable in the name of a corporation to signify that the business is a corporation? A. Company B. Corporation C. Inc. D. Company, Corporation, and Inc. E. Company and limited, but not Inc.
Q: A corporation is a(n) _____ corporation in states in which it conducts business but is not incorporated. A. visiting B. foreign C. interstate D. intrastate E. approved
Q: A(n) _____ corporation is a business incorporated in another country. A. visiting B. foreign C. interstate D. alien E. approved
Q: ________________ generally do not offer stock to the public. A. Alien corporations B. Foreign corporations C. Closely held corporations D. Carefully held corporations E. Minority shareholder controlled corporations
Q: A ______ corporation is a corporation created by the government to help administer law. A. public B. private C. closely held D. domestic E. publicly held
Q: Private persons create ______ corporations for private purposes. A. public B. private C. true D. domestic E. publicly held
Q: Which of the following is false regarding a nonprofit corporation? A. A nonprofit corporation may not earn profits. B. Nonprofit corporations do not have shareholders. C. An objective of a nonprofit corporation is not to earn profit. D. Nonprofit corporations do not issue stock. E. Churches and charitable organizations are examples of nonprofit corporations.
Q: A corporation is a(n) _____ corporation in the state in which it is incorporated. A. domestic B. home C. recognized D. approved E. certified
Q: State incorporation statutes typically grant _______________________ to corporations. A. the power of perpetual existence B. the power to sue and be sued in the corporation's name C. the power to make charitable donations D. the power of perpetual existence, the power to sue and be sued in the corporation's name, and the power to make charitable donations E. the power of perpetual existence and the power to sue and be sued in the corporation's name, but not the power to make charitable donations
Q: If corporations act beyond their express and implied powers, the act is called a(n) _____ act. A. respondeat superior B. ultra vires C. res ipsa loquitur D. stare decisis E. res propertie
Q: A corporation commits an ultra vires when _____. A. it creates contracts outside the scope of its powers B. it hires incompetent managers C. it hires employees with criminal backgrounds D. it refuses to declare dividends E. it refuses to declare a stock split
Q: A corporation may distribute their income to shareholders through ____________. A. allocations B. grants C. dividends D. provisions E. allowances
Q: ____________________ is a term for profits kept by a corporation for reinvestment. A. Added earnings B. Retained earnings C. Approved income D. Added profit E. Saved profit
Q: ______________________ references the liability of corporations for torts and crimes committed by their agents during the scope of their employment. A. Stare decisis B. Res ipsa loquitur C. Respondeat superior D. Absoluta respond E. None of these
Q: Which is false about a corporation? A. Corporations cannot exist separately from their shareholders B. Corporations are legal entities C. Corporations have rights under the Fifth Amendment to the U.S. Constitution D. Corporations can sue or be sued by others E. Corporations are subject to state incorporation statutes
Q: A(n) ____________________ is a document a corporation files with the state explaining its organization. A. certificate of organization B. articles of incorporation C. proof of incorporation D. proof of capitalization E. establishment of corporation
Q: Which of the following is generally true regarding management of a corporation? A. Shareholders do not participate in corporate management. B. Shareholders elect a board of directors. C. The board of directors selects officers to manage the day-to-day business of the corporation. D. Shareholders do not participate in corporate management, shareholders elect a board of directors, and the board of directors selects officers to manage the day-to-day business of the corporation. E. Shareholders do not participate in corporate management and shareholders elect a board of directors, but shareholders select officers to manage the day-to-day business of the corporation.
Q: Federal securities law does not require that target corporations assist aggressors in any way.
Q: Aggressors often try to win the favor of a few institutional investors that own large block of shares.
Q: In regard to the board of directors of a corporation, German law is similar to the U.S. in that a one-tier board system is in effect.
Q: A dissolution of a corporation must be voluntary.
Q: A merger requires shareholder approval, but a consolidation does not.
Q: A type of takeover in which the aggressor corporation offers the target shareholders a price above their stock's current market value is a leverage buyout.
Q: A hostile takeover is when the management of the target corporation objects to the takeover.
Q: A shareholder can sue a director or officer if the shareholder feels that the director or officer has caused harm to the business by violating a fiduciary duty.
Q: A shareholder may not be held personally liable to a corporation for receiving watered stock.
Q: In most states, a corporation's bylaws can negate preemptive rights.
Q: Consolidations today are rare.
Q: Directors and officers are self-dealing when they make decisions that violate their corporate duty of loyalty.
Q: An individual director or officer may not personally benefit from decisions made by the board of directors.
Q: Directors and officers have a fiduciary duty of care.
Q: Corporations have rights under the U.S. Constitution.
Q: Directors can be removed from their positions for cause, which is failing to perform a required duty.
Q: Shareholders are directly responsible for the daily management of a corporation.
Q: The articles of incorporation determine who has the power to amend the corporate bylaws after the first organizational meeting.
Q: A certificate of incorporation provides the rules and regulations that govern a corporation's internal management.
Q: Shareholders may not be held personally liable for a defective corporation's actions.
Q: Nonresident aliens may not be shareholders of an S corporation.
Q: A promoter begins the corporate creation and organization process and, raises capital for the new corporation.
Q: A corporation must be incorporated in the state in which it has its principal place of business.
Q: State incorporation statutes do not require corporations to indicate in the name of the corporation.
Q: A corporation is considered alien in states in which it conducts business but is not incorporated.
Q: Closely held corporations generally offer stock for sale to the general public.
Q: An S corporation has the tax status of a partnership.
Q: A corporation commits ultra vires when it acts beyond its express and implied powers.
Q: Most corporations are nonprofit corporations.
Q: Corporations have implied powers.
Q: Shareholders of a corporation can freely transfer their corporate shares.
Q: A corporation must be dissolved if over 50% of the shareholders die.
Q: Dividends are profits that a corporation keeps.
Q: Corporations have only those powers that states grant them.
Q: A franchisor is the owner of a trade name or trademark who is a party to an arrangement whereby another party sells goods or services under the trade name or trademark.
Q: A franchise is a business arrangement between an owner of a trade name or trademark and a person who sells goods or services under the trade name or trademark.
Q: In U.S. law, corporations are legal entities and have rights under the Constitution.
Q: Corporations generally provide unlimited transferability of ownership interest.
Q: Cooperatives must be incorporated.
Q: An association between two or more persons or corporations created for a specific business undertaking is a joint stock company.
Q: An S corporation is a corporation that is taxed like a partnership.
Q: A general corporation may only have up to 210 shareholders while an S corporation cannot have more than 75 shareholders.
Q: An S corporation is an unincorporated business that is taxed like a partnership with the limited liability of a corporation.
Q: Qualification is a process that allows limited liability companies to register in additional states in which they want to operate.
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