Chapter 29/30

Z Hauling holds itself out to customers as being a corporation but makes no attempt to incorporate. In this circumstance, EZ Hauling is most likely

a corporation by estoppel

Market Data Corporation is required to file a registration statement with the Securities and Exchange Commission. This statement must contain

a description of securities being offered for sale

Household Products Corporation wants to make an offering of securities to the public. The offering is not exempt from registration under the Securities Act of 1933. Before the firm sells its securities, it must provide investors with

a prospectus

Meat Packers Inc. offers its securities for sale only in a single state. The law in this state is like the law in most states. Thus, the company's offer is subject to the state's securities statutes, which are likely to include

all of the choices

Pipe Inc.'s stated purpose is to install plumbing. Pipe contracts with Quality Contracting to pour a new building's foundation despite lacking the skill and license to do such work. This is most likely

an ultra vires act

Under the Securities Act of 1933, securities include

any instrument representing corporate ownership or debt

Kay and Leo form Metro Delivery Inc. Responsibility for all policymaking decisions necessary to the management of corporate affairs rests with Metro's

board of directors

Eli, an officer for Food Stores Inc., buys 10,000 shares of its stock. One week later, the company announces that it will merge with a competitor, Grocery Mart Corporation, and the price of Food Stores' stock increases. One month later, Eli sells his shares for a profit. Under Section 16(b) of the Securities Exchange Act of 1934, Eli would not be liable if, after buying the stock, he had waited

more than six months to sell it

Gil is an officer for HVAC Corporation. Due to Gil's choice of a certain supplier, HVAC's costs are somewhat higher than they might have been if a different supplier had been chosen. Gil is most likely liable for

none of the choices

Dairy Stores Inc. owns and operates convenience stores. The firm wants to make an initial public offering of securities. If Dairy qualifies for an exemption from the federal registration requirement, the firm is

not necessarily exempt from a state registration requirement

Spices & Seasonings Inc. is a private, for-profit corporation that is owned by eight shareholders who are not members of the same family but are personally known to one another. To avoid management problems caused by sharing control with someone the shareholders do not know or like, the firm could

restrict the transferability of its shares to outside persons

Nevis and Olsen want to do business as a corporation—Pastries & Pies Inc. The procedure for forming this firm is prescribed by

state law

Roz, a director of Soy Inc., is specially trained in petroleum trading. Soy's board approves several deals in which the company pays too much for soybeans. Roz approves all the deals without first reviewing them. Roz is most likely liable for breach of

the duty of care

Daisy is a director of Extraction Corporation. She opposes an offer to merge Extraction with Fill Inc. because she would lose her board position. Daisy is most likely liable for breach of

the duty of loyalty