Business Law Ch. 43

False. There are constitutional limitations, but corporations may be regulated by statutes

Corporations are never regulated by statutes

False

Corporations cannot enter into joint ventures and partnerships

As a "person" with certain inaliable rights, and as a "citizen". For certain purposes, such as determining the right to bring a lawsuit in a federal court, a corporation is a citizen of any state in which it has been incorporated and of the state where it has its principal place of business

How is a Corporation protected?

true

In most states, the process of forming a corporation is begun by filing an application for a certificate of incorporation

False. Subchapter S corporations are limited to 100 shareholders

Subchapter S corporations can have unlimited number of shareholders

1) the name of the corporation, 2) the number of shares of stock the corporation is authorized to issue, 3) the street address of the corporation's initial registered office and the name of its initial registered agent, 4) the name and address of each incorporator

What 4 elements must the articles of incorporation include?

true

a close corporation's shares are publicly traded

true

a corporation can sue and be sued in its own name, but shareholders cannot be sued or held liable for corporate actions or obligations

false

a corporation cannot issue bonds to exercise its power to borrow money

Perpetual life

a corporation has continuous life--the power to continue as an entity forever or for a stated period of time regardless of changes in stock ownership or the death of any shareholders

True

a corporation holding a Texas charter is a domestic corporation in Texas but a foreign corporation in all other states

true, unless the corporation takes some affirmative action to adopt the contract, such as express words of adoption or acceptance of the contract's benefits

a corporation is not liable on a contract made by its promoter for its benefit

False. The corporation is owned by the corporation itself

a corporation is owned by the person who owns shares in the corporation

professional corporation

a corporation organized to conduct a profession, such as law, medicine, accounting, architecture, or engineering.

true

a corporation, having power to incur debts, may mortgage or pledge its property as security for those debts, except in the case of public service companies like street transit systems and gas and electric companies

corporate seal

a distinctive seal used by a corporation. It is not required to be used in business transactions unless stated by a statute or a natural person

corporate name

a name required to identify the corporation. Generally, it may select any name. Most states require that the corporate name contain some word indicating the corporate character, and that the name is not deceptively similar to another corporation

Subchapter S

a subdivision of the Internal Revenue Code. Subchapter S status allows the shareholders to be treated as partners for tax purposes and retain the benefit of limited liability.

ultra vires

act or contract that the corporation does not have authority to do or make

corporation

artificial being created by government grant, which for many purposes is treated as a natural person

False. Bylaws are subordinate to the general law of the state, the statute under which the corporation is formed, and the charter of the corporation

bylaws overrule the general law of the state

merger (of corporations)

combining of corporations by which one absorbs the other and continues to exit, preserving its original charter and identity while the other corporation ceases to exist

consolidation (of corporations)

combining of two or more corporations in which the corporate existence of each one ceases and a new corporation is created

treasury stock

corporate stock that the corporation has reacquired

true, but they cannot sign a contract, since they have no hands

corporation codes give corporations the power to make contracts

foreign corporation

corporation incorporated under the laws of another state

eleemosynary corporation (nonprofit corporation)

corporation organized for a charitable or benevolent purpose. Includes hospitals, nursing homes, and universities.

private corporation

corporation organized for charitable and benevolent purposes or for purposes of finance, industry, and commerce (private corporations are often called public in business circles when their stock is sold to the public)

corporation by estoppel

corporation that comes about when parties estop themselves from denying that this corporation exists

public corporation

corporation that has been established for governmental purposes and for the administration of public affairs (a city is a public or municipal corporation acting under authority granted to it by the state)

domestic corporation

corporation that has been incorporated by the state in question as opposed to incorporation by another state

close corporation

corporation whose shares are held by a single shareholder or a small group of shareholders

corporation de jure

corporation with a legal right to exist by virtue of law

false

corporations do not have the implied power to borrow money in carrying out their authorized business purposes

authorities

corporations formed by government that perform public services (a city parking facility, public housing project)

special service corporations

corporations formed for transportation, banking, insurance, and savings and loan operations and similar specialized functions. They are subject to separate codes or statutes with regards to their organization.

true

corporations have the power to issue or endorse negotiable instruments and to accept drafts

Forfeiture of charter, judicial dissolution, voluntary dissolution

dissolution of a corporation can be done by doing the following:

de facto

existing in fact as distinguished from as of right, as in the case of an officer or a corporation purporting to act as such without being elected to the office or having been properly incorporated

benefit corporation (B-corporation)

for-profit corporation that sets a goal to create a public benefit while still providing economic returns to its investors

charter

grant of authority from a government to exist as a corporation. Generally replaced today by a certificate of incorporation approving the articles of incorporation

incorporator

one or more natural persons or corporations who sign and file appropriate incorporation forms with a designated government official

promoters

persons who plan the formation of the corporation and sell or promote the idea to others

police power

power to govern, the power to adopt laws for the protection of the public health, welfare, safety, and morals

quasi-public corporation

private corporation furnishing services on which the public is particularly dependent, for example, a gas and electric company (sometimes known as a public service corporation or public utility)

true

professional incorporation does not shield a practitioner from personal liability relating to the professional services rendered

conglomerate

relationship of a parent corporation to subsidiary corporations engaged in diversified fields of activity unrelated to the field of activity of the parent corporation

bylaws

rules and regulations enacted by a corporation to govern the affairs of the corporation and its shareholders, directors, and officers

false. Federal and state laws and administrative agencies regulate in detail the way theses businesses are conducted

special service corporations are unregulated

general corporation code

state's code listing certain requirements for creation of a corporation

true. However, a solvent corporation may not transfer all of its property without the consent of all or a substantial majority of its shareholders

the corporate property may be leased, assigned for the benefit of creditors, or sold

false, unless the promoter is exempted by the terms of the agreement or by the circumstances surrounding it

the promoter is not held liable for all contracts made on behalf of the corporation before its existence

1) a valid law exists under which the corporation could have been properly incorporated, 2) an attempt to organize the corporation has been made in good faith, 3) s genuine attempt to organize in compliance with statutory requirements has been made, and 4) corporate powers have been used

the traditional elements of a de facto corporation are the following:

True

there is no "uniform" corporation act

certificate of incorporation (articles of incorporation)

written approval from the state or national government for a corporation to be formed