Question 1

Set forth the situations under which a court is likely to pierce the corporate veil.

Accepted Answer

Courts are likely to pierce the corporat...

Question 2

Which of the following is false regarding corporations?

Accepted Answer

A)   Corporations are legal entities.
B)   Corporations exist separately from their shareholders.
C)   Corporations can sue or be sued by others.
D)   Courts consider corporations to be "legal persons."
E)   Corporations cannot claim rights under the U.S. Constitution.F) C) and D)
G) A) and D)

Question 3

Which of the following was the result on appeal in Federal Election Comm'n v.Beaumont,the case in the text in which the Supreme Court considered whether certain of the Federal Election Commission's regulations including,for example,regulating corporate political participation through the use of PAC's,constitute unconstitutional limits on speech?

Accepted Answer

A)   That the regulations impermissibly regulated speech because nonprofit corporations were treated differently than corporations operated on a for profit basis.
B)   That the regulations impermissibly regulated speech because unreasonable distinctions were made between exemptions granted to certain nonprofit corporations but not to others.
C)   That the regulations impermissibly regulated speech because, using a strict scrutiny standard, the regulations were overly broad.
D)   That the regulations permissibly regulated speech because nonprofit corporations, unlike corporations operated on a for profit basis, lack constitutional protection in the area of free speech.
E)   That the regulations permissibly regulated speech because the regulations allowed some control of campaign activity without jeopardizing the associational rights of advocacy organizations' members.F) A) and D)
G) A) and C) E

Question 4

Which of the following is a term for profits kept by a corporation for reinvestment?

Accepted Answer

A)   Added earnings
B)   Retained earnings
C)   Approved income
D)   Added profit
E)   Saved profitF) None of the above
G) A) and B)

Question 5

Which of the following is not required in a corporation's articles of incorporation under the Revised Model Business Corporation Act?

Accepted Answer

A)   The name of the corporation
B)   The name of the registered agent
C)   The names and addresses of the incorporators
D)   Information regarding the purpose of the corporation
E)   The address of the registered officeF) B) and D)
G) A) and E)

Question 6

Which of the following generally does not offer stock to the public?

Accepted Answer

A)   Alien corporations
B)   Foreign corporations
C)   Closely held corporations
D)   Carefully held corporations
E)   Minority shareholder controlled corporationsF) A) and E)
G) A) and D)

Question 7

What type of tax treatment would an S corporation provide in regard to losses?

Accepted Answer

A)   Shareholders may deduct corporate losses from their personal income.
B)   Losses may only be deducted from the S corporation's taxes, not the shareholders' personal income.
C)   Losses may only be deducted from shareholders' personal income when the S corporation has shown a profit for at least two years.
D)   Losses may only be deducted from shareholders' personal income when the S corporation has shown a profit for at least three straight years.
E)   Losses may only be deducted from shareholders' personal income when the shareholder's gains from other endeavors exceed losses from the S corporation.F) A) and D)
G) B) and C)

Question 8

Which of the following is a corporation that,with minor errors,has substantially met the requirements of the state incorporation statute?

Accepted Answer

A)   A de jure corporation
B)   A de facto corporation
C)   A corporation by estoppel
D)   A corporation by reservation
E)   An inactive corporationF) B) and E)
G) B) and D)

Question 9

A corporation is a[n] ______ corporation in the state in which it is incorporated.

Accepted Answer

A)   Domestic
B)   Home
C)   Recognized
D)   Approved
E)   CertifiedF) None of the above
G) A) and C)

Question 10

The articles of incorporation determine who has the power to amend the corporate bylaws after the first organizational meeting.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is false regarding the question presented in the Case Opener regarding Facebook's status as a corporation?

Accepted Answer

A)   Its corporate status allows it to sue and be sued.
B)   Its corporate status allows it to enjoy existence for up to 100 years.
C)   Its corporate status allows it to acquire property.
D)   Its corporate status allows it to make contracts.
E)   Its corporate status allows it to make charitable donations.F) A) and D)
G) A) and B) B

Question 12

A[n] ______ corporation is a business incorporated in another country.

Accepted Answer

A)   Visiting
B)   Foreign
C)   Interstate
D)   Alien
E)   ApprovedF) C) and D)
G) A) and D)

Question 13

Closely held corporations generally offer stock for sale to the general public.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is false regarding requirements needed for a business to qualify as an S corporation?

Accepted Answer

A)   It must have no more than 100 shareholders.
B)   Individuals, trusts, partnerships, and in some circumstances corporations can be shareholders.
C)   All S corporations must be domestic corporations.
D)   No shareholder can be a nonresident alien.
E)   S corporations can issue only one class of shares, although they need not have identical voting rights.F) C) and D)
G) A) and E)

Question 15

Which of the following is false regarding management of a corporation?

Accepted Answer

A)   Shareholders generally 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)   If shareholders die, corporations do not dissolve.
E)   In most states, corporations can exist indefinitely.F) C) and D)
G) None of the above A

Question 16

Which of the following is a document a corporation files with the state explaining its organization?

Accepted Answer

A)   Certificate of organization
B)   Articles of incorporation
C)   Proof of incorporation
D)   Proof of capitalization
E)   Establishment of corporationF) C) and E)
G) B) and E)

Question 17

Which of the following if true regarding powers state incorporation statutes typically grant to corporations?

Accepted Answer

A)   State incorporation statutes give corporations the power to make charitable contributions.
B)   State incorporation statutes prohibit corporations from loaning money because that is within the realm of state banks recognized by the state banking regulatory authority.
C)   State incorporation statutes give corporations existence for up to 100 years.
D)   State incorporation statutes expressly state the powers granted to corporations thereby negating the existence of implied powers.
E)   State incorporation statutes generally expressly give corporations only the broad authority to operate within the law to the benefit of stockholders resulting in most actions of corporations arising from implied powers.F) D) and E)
G) All of the above

Question 18

Assuming ABC's corporate status is in place,which of the following is Bernice's best theory,if any,in order to hold Slick personally liable to her?

Accepted Answer

A)   That the corporate veil should be pierced because Slick committed fraud through the corporation.
B)   That in equity Slick should be held personally liable.
C)   That Slick should be personally liable because of his status as a shareholder.
D)   That Slick should be personally liable because he acted on behalf of the corporation in soliciting the funds.
E)   Because of ABC's corporate status and her responsibility to investigate the situation, she will not be able to hold Slick personally liable to her.F) C) and D)
G) All of the above

Question 19

Based on the information available,is there an impediment to the business qualifying as an S Corporation?

Accepted Answer

A)   Yes, because there must be at least 100 shareholders involved.
B)   Yes, because a business must operate as a partnership for at least two years before converting to an S corporation.
C)   Yes, because a business must operate as a general corporation for at least two years before converting to an S corporation.
D)   Yes, because at least one-third of the shareholders in an S corporation must be corporations.
E)   No.F) None of the above
G) C) and E)

Question 20

Only the state can challenge a de facto corporation's existence as a corporate entity in a suit called an action of ____.

Accepted Answer

A)   Quo facto
B)   Quo jure
C)   Quo warranto
D)   Sine qua non
E)   Res ipsaF) B) and C)
G) A) and B)

Exam 38: Corporations: Formation and Financing

Set forth the situations under which a court is likely to pierce the corporate veil.

Correct Answer
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Courts are likely to pierce the corporat...
View Answer

Which of the following is false regarding corporations?

Correct Answer
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E

Which of the following is a term for profits kept by a corporation for reinvestment?

Correct Answer
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Which of the following is not required in a corporation's articles of incorporation under the Revised Model Business Corporation Act?

Correct Answer
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Which of the following generally does not offer stock to the public?

Correct Answer
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What type of tax treatment would an S corporation provide in regard to losses?

Correct Answer
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Which of the following is a corporation that,with minor errors,has substantially met the requirements of the state incorporation statute?

Correct Answer
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A corporation is a[n] ______ corporation in the state in which it is incorporated.

Correct Answer
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The articles of incorporation determine who has the power to amend the corporate bylaws after the first organizational meeting.

Correct Answer
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Which of the following is false regarding the question presented in the Case Opener regarding Facebook's status as a corporation?

Correct Answer
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B

A[n] ______ corporation is a business incorporated in another country.

Correct Answer
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Closely held corporations generally offer stock for sale to the general public.

Correct Answer
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Which of the following is false regarding requirements needed for a business to qualify as an S corporation?

Correct Answer
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Which of the following is false regarding management of a corporation?

Correct Answer
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A

Which of the following is a document a corporation files with the state explaining its organization?

Correct Answer
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Which of the following if true regarding powers state incorporation statutes typically grant to corporations?

Correct Answer
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Assuming ABC's corporate status is in place,which of the following is Bernice's best theory,if any,in order to hold Slick personally liable to her?

Correct Answer
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Based on the information available,is there an impediment to the business qualifying as an S Corporation?

Correct Answer
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Only the state can challenge a de facto corporation's existence as a corporate entity in a suit called an action of ____.

Correct Answer
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Exam 38: Corporations: Formation and Financing

Set forth the situations under which a court is likely to pierce the corporate veil.

Correct AnswerverifiedCourts are likely to pierce the corporat...View AnswerShow Answer

Which of the following is false regarding corporations?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedE

Which of the following is a term for profits kept by a corporation for reinvestment?

Correct AnswerverifiedShow Answer

Which of the following is not required in a corporation's articles of incorporation under the Revised Model Business Corporation Act?

Correct AnswerverifiedShow Answer

Which of the following generally does not offer stock to the public?

Correct AnswerverifiedShow Answer

What type of tax treatment would an S corporation provide in regard to losses?

Correct AnswerverifiedShow Answer

Which of the following is a corporation that,with minor errors,has substantially met the requirements of the state incorporation statute?

Correct AnswerverifiedShow Answer

A corporation is a[n] ______ corporation in the state in which it is incorporated.

Correct AnswerverifiedShow Answer

The articles of incorporation determine who has the power to amend the corporate bylaws after the first organizational meeting.

Correct AnswerverifiedShow Answer

Which of the following is false regarding the question presented in the Case Opener regarding Facebook's status as a corporation?

Correct AnswerverifiedB

A[n] ______ corporation is a business incorporated in another country.

Correct AnswerverifiedShow Answer

Closely held corporations generally offer stock for sale to the general public.

Correct AnswerverifiedShow Answer

Which of the following is false regarding requirements needed for a business to qualify as an S corporation?

Correct AnswerverifiedShow Answer

Which of the following is false regarding management of a corporation?

Correct AnswerverifiedA

Which of the following is a document a corporation files with the state explaining its organization?

Correct AnswerverifiedShow Answer

Which of the following if true regarding powers state incorporation statutes typically grant to corporations?

Correct AnswerverifiedShow Answer

Assuming ABC's corporate status is in place,which of the following is Bernice's best theory,if any,in order to hold Slick personally liable to her?

Correct AnswerverifiedShow Answer

Based on the information available,is there an impediment to the business qualifying as an S Corporation?

Correct AnswerverifiedShow Answer

Only the state can challenge a de facto corporation's existence as a corporate entity in a suit called an action of ____.

Correct AnswerverifiedShow Answer

Correct Answer
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Courts are likely to pierce the corporat...
View Answer

Correct Answer
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E

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B

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A

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