BlAW Reading Cap 22

Which of the following is an incorrect statement about stock certificates?

A shareholder's ownership in a corporation depends on his or her possession of a physical stock certificate.

To initiate a stock purchase in an attempted corporate takeover, the ______ must appeal directly to the shareholders of the corporation it hopes to buy, known as the target corporation.

aggressor

Corporate officers are in a contractual relationship with a corporation, and if they are removed from their positions in violation of the terms of the contract, the corporation may be liable for

breach of contract

Amendment to the U.S. Constitution protects corporations from unreasonable searches and seizures.

The Fourth

Which of the following is one of the two phases of the death of a corporation?

dissolution and liquidation

is a distribution of corporate profits or income to the shareholders.

dividend

If shareholders die, corporations

do not dissolve

Most corporations are ______ corporations.

for-profit

Which of the following is involved in the creation of a corporation?

general organizational activities necessary for incorporation

When a ______ succeeds, the target corporation's management frequently compares the transition to a full-scale invasion characterized by layoffs and dramatic changes in company policy.

hostile takeover

States give powers to corporations through state incorporation statutes and through each corporation's articles of

incorporation

Which of the following is a recognized part of creating a corporation?

legal activities necessary for incorporation

The board of directors of a corporation selects ______ to manage the day-to-day business of the corporation.

officers

In the context of a corporate takeover, a(n) ______ offer is a takeover-resistance strategy in which the target corporation offers to buy its shareholders' stock.

self-tender

Dividends are paid to the ______ of a corporation on the orders of its ______.

shareholders; directors

Because corporations are legal entities distinct from their ______, corporations are ______ for corporate actions.

shareholders; liable

______ incorporation statutes establish the requirements for corporate formation.

state

A corporate ______ is the purchase of one corporation's stock by another corporation as a means of gaining control of the selling corporation.

takeover

Which of the following is one of the two primary fiduciary duties directors and officers owe to the corporation?

the duty of loyalty

Which of the following is not an express power state incorporation statutes typically grant to a corporation?

the power to be immune from corporate taxation

Generally, shareholders can freely transfer

their corporate shares

Which of the following is an inaccurate statement about the criminal and tort liabilities of corporate officers and directors?

Corporate directors cannot be held personally responsible for the torts and crimes of other employees within the organization.

Which of the following is a true statement about whether corporations can sue and/or be sued by others?

Corporations can sue or be sued by others.

Which of the following is an accurate statement about corporations and due process rights?

Corporations have due process rights under both the Fifth and the Fourteenth Amendments to the U.S. Constitution.

Which of the following is an accurate statement about the personal malpractice liability of dentists, doctors, or other professionals who practice in a professional corporation?

Courts sometimes impose personal malpractice liability on those who practice in a professional corporation.

Which of the following is an accurate statement about the life of a corporation?

The life of a corporation does not end when the lives of its owners end.

S corporations are a particular type of ____ corporation.

closely held

All corporate directors have a right to ______ for their work.

compensation

Which of the following is not a way corporations can be classified?

constructive or symbolic / T corporations

In U.S. law, ______ are legal entities.

corporations

In the context of corporate financing, ______ securities represent loans to a corporation

debt

The main liability that shareholders of the corporation face is liability for the ______ of the company.

debts

Shareholders of a corporation elect a board of ______ to manage the corporation.

directors

Corporate officers are technically ______ of the corporation.

employees

If corporations act beyond their ______ and ______ powers, the act is called an ultra vires act.

express; implied

If a majority shareholder owns such a significant portion of a corporation's stock that he or she essentially controls the firm, the majority shareholder has a ______ duty to act with care and loyalty in selling his or her shares because the sale of his or her shares will shift control of the company to another individual.

fiduciary

Which of the following is not a factor business owners consider when selecting a state for incorporation?

state laws governing trademarks and patents

Because corporations are creatures of the ______, they have only those powers ______ grant(s) them

state; states

An acquiring corporation, or ______, can buy any or all of another corporation's voting shares. Through such a stock purchase, the purchasing corporation gains control of the selling corporation in a corporate takeover.

aggressor

A stock ______ is a document that serves as a stockholder's proof of ownership in a corporation.

certificate

powers typically granted to corporations by state incorporation statutes include the power to make contracts, the power to borrow and lend money, the power to make charitable donations, and the power to establish rules for managing the corporation.

Express

A corporation is a(n) ______ corporation in the state in which it is incorporated.

domestic

A(n) ______ corporation is a corporation whose stock is available to the public.

publicly held

takeovers are takeovers to which the management of the target corporation objects.

Hostile

Corporations commit ______ acts most frequently when they create contracts outside the scope of their powers

ultra vires

Which of the following is an accurate statement about professional corporations in the United States?

All 50 states permit professional corporations to incorporate.

A corporation that does business in states other than the state in which it is incorporated must obtain a certificate of ______ in each state in which it does business.

authority

Shareholders seeking to make a profit in for-profit corporations purchase the ______ issued by the corporations.

stock

Which of the following is an accurate statement about the fiduciary duties of individuals within a corporation?

The fiduciary duties of the individuals depend on whether they are directors, officers, or shareholders.

Corporations are liable for the torts and crimes committed by their agents during the scope of their employment. Courts refer to this liability as the doctrine of

respondeat superior

raise capital for an infant corporation by making subscription agreements with subscribers in which the subscribers agree to purchase stock in the new corporation.

Promoters

Which of the following is an accurate statement about the duties of corporate shareholders?

Shareholders typically owe few fiduciary duties to the corporation.

Which of the following is an incorrect statement about shareholder transferability of corporate shares?

Shareholders' shares are only transferable upon their death.

Each individual corporation's charter creates a contract between that corporation and the

state

dissolution of a corporation occurs when its directors or shareholders trigger the dissolution process.

Voluntary

Which of the following is an accurate statement about corporate criminal liability?

Today, criminal prosecutions of corporations are much more common than they were in the past.

What is the legal reason for holding corporate directors and officers personally responsible for the torts and crimes of employees within their organization?

lack of adequate supervision

A shareholder's liability for corporate actions is

limited to his or her corporate investment

Major groups of individuals within a corporation include all but which of the following?

partners

begin the creation and organization of a corporation by arranging for necessary capital, financing, and licenses.

promoters

A(n) ______ corporation enjoys the tax status of a partnership.

S

In the context of corporate financing, debt securities are

bonds

Which of the following is an inaccurate statement about publicly held corporations?

Shareholders wishing to sell their shares of stock in publicly held corporations usually face many transfer restrictions.