Chapter 20 Test Flash Cards
Most business corporations are incorporated under federal, rather than state, law
false
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
false
The Model Act requires that a corporation assign a par value to its stock
false
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
false
What is meant by the term piercing the corporate veil
Corporate shareholders may be personally liable to a person damaged by an act of the corporation
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
Jenny will not be held personally liable for a decision that results in money losses to the company
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
True
Fashions, Inc. has 12 shareholders. The company is subject to the Model Act. What officers is Fashions, Inc. required to have
Whatever officers are described in the bylaws. The Model Act is flexible.
A corporate charter is filed with:
a state s Secretary of State office
A corporation must obtain shareholder approval before the company
all of the above
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:
all of the above including any corp in delaware
For the business judgment rule to apply
all of the above, cant see other answers
Which of the following statements is correct
all of the above-- cants see the answers so not sure what this is refering to anymore :(
Which of the following situations will allow a court to pierce the corporate veil?
all of the above-Corporate shareholders may be personally liable to a person damaged by an act of the corporation
The officers of a corporation are
are elected by the board of directors
Laurie is incorporating her business. The business s home state is Wisconsin. Business will be conducted in California, Michigan, Pennsylvania, and Virginia. Laurie
can incorporate the business in any state
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
foreign
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
one
Who establishes executive compensation
the board of directors
MegaCorp purchased 10,000 shares of its own stock that had previously been owned by private investors. The stock MegaCorp repurchased is called:
treasury stock
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
true
A director who has engaged in self-dealing has violated the duty of loyalty to the corporation
true
Directors have the authority to manage the corporate business
true
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
true
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
will be liable on the contract only if the corporation adopts the contract
