True or False - Test 3
True
C corporations may not own shares in an S corporation
False
Estates may not own shares in an S corporation.
True
In general, unless restricted by state law, an LLC can conduct any lawful activity.
False
It was improper for Bilk, the promoter, to contract for the option without having first secured the assent of the Board of Directors.
False
The corporate veil is likely to be pierced and the shareholders held personally liable if an ultra vires act has been committed.
True
The corporate veil is likely to be pierced and the shareholders held personally liable if the shareholders have commingled their personal funds with those of the corporation
False
Trusts cannot be members of an LLC.
False
Trusts may not own shares in an S corporation.
False
Unless otherwise provided in the limited partnership agreement, The assignee will become a substituted limited partner because a general partner consented.
False
Unless otherwise provided in the limited partnership agreement, a limited partner has the right to take part in the control of the partnership.
True
Unless otherwise provided in the limited partnership agreement, a person may own a limited partnership interest in the same partnership in which she is a general partner.
True
Unless otherwise provided in the limited partnership agreement, the assignee of the interest will not become a substituted limited partner unless the limited partner also consents.
False
Unless otherwise provided in the limited partnership agreement, the assignee will have the right to inspect the partnership's books.
False
Unless otherwise provided in the limited partnership agreement, the partnership will be dissolved when the interest is assigned and only the general partner consent's to the assignee's admission as a limited partner.
False
the corporate veil is likely to be pierced and the shareholders held personally liable if the corporation has elected S corporation status under the IRC.
False
A corporation's board of directors may dissolve the corporation without stockholder approval.
True
A corporation's board of directors may purchase substantially all of the assets of another corporation without stockholder approval.
False
A corporation's articles of incorporation must include its bylaws.
False
A corporation's articles of incorporation must include provisions for issuance of par and no-par shares.
False
A corporation's articles of incorporation must include quorum voting requirements.
False
Unless otherwise provided in the limited partnership agreement, a general partner's capital contribution may not consist of services rendered to the partnership.
False
Unless otherwise provided in the limited partnership agreement, a limited partner is subject to personal liability for partnership debts.
False
Unless otherwise provided in the limited partnership agreement, upon the assignment of a limited partner's interest the assignee will become a substituted limited partner if the consent of two-thirds of all partners is obtained.
False
Unless otherwise provided in the limited partnership agreement, upon the death of a limited partner, the partnership will be dissolved.
False
A corporation's articles of incorporation must include the election of either C corporation or S corporation status.
False
A corporation's articles of incorporation must include the name and address of each pre-incorporation subscriber.
True
A corporation's articles of incorporation must include the name and address of the corporation's promoter.
True
A corporation's articles of incorporation must include the name of the registered agent
False
A corporation's articles of incorporation must include the names of stockholders.
True
A corporation's articles of incorporation must include the nature and purpose of the corporation's business.
True
A corporation's articles of incorporation must include the number of authorized shares.
False
A corporation's board of directors may amend the articles of incorporation without stock holder approval.
False
A corporation's board of directors may sell substantially all of the corporation's assets without stockholder approval.
True
A corporation's initial bylaws are adopted by either the incorporators or the board of directors.
True
A general partner may be a secured creditor of the limited partnership.
True
A limited partner has the right to have a formal accounting of partnership affairs whenever the circumstances render it just and reasonable.
True
A limited partner has the right to have the same rights as a general partner to a dissolution and winding up of the partnership
False
A limited partner may not be an unsecured creditor of the limited partnership.
False
A limited partnership can be formed with limited liability for all partners.
True
A limited partnership has the right to have reasonable access to the partnership books and to inspect and copy them.
True
A nonresident alien may not own shares in an S corporation.
True
A shareholder can contribute property to either an S corporation or C corporation without being taxed.
False
All LLC members of an LLC must be U.S. citizens.
False
An LLC may engage only in state-regulated professional activities.
False
An LLC may operate only in the state in which it is organized.
False
An LLC must be managed by one or more of its members.
False
An LLC must have at least two members.
False
An S corporation may have 200 unrelated shareholders.
True
An S corporation may have voting common stock and non voting common stock
False
An S corporation may have voting common stock and non-voting preferred stock.
False
Both S and C corporations have the disadvantage of double taxation.
False
Both S and C corporations have the disadvantage of restricting ownership to citizens or residents of the United States.
True
Even if, as Bilk, the promoter, claimed, the building was fairly worth more than $200,000, Bilk nevertheless must return the $45,000 to the corporation.
False
If Grey (limited partner) dies, unless otherwise provided in the limited partnership agreement, Grey's estate will be free from any liabilities which may have been incurred by Grey as a limited partner.
False
If Grey (limited partner) dies, unless otherwise provided in the limited partnership agreement, Grey's executor automatically becomes a substituted limited partner.
True
If Grey (limited partner) dies, unless otherwise provided in the limited partnership agreement, Grey's executor will have all the rights of a limited partner for the purpose of selling the estate.
False
If a limited partner is dissatisfied with the general partner's performance, they have the right to have themselves elected as a general partner by a majority vote of the limited partners in number and amount.
False
Since an LLC is an American legal entity, it cannot conduct operations outside of the United States.
False
The corporate veil is likely to be pierced and the shareholders held personally liable if a partnership incorporates its business solely to limit the liability of its partners.
True
The owners of a limited liability company (LLC) are known as members.
