Business Law Ch. 27

T OR F: The major advantage of the corporate form over the partnership form is in the way the corporate form is taxed.

False

T or F: A corporation cannot acquire and hold stock in other corporations

False

T or F: A corporation that files for bankruptcy must be dissolved

False

T or F: A merger of corporations, the two corp. cease to exist and a new corp. is formed

False

T or F: The biggest disadvantage of a corporation is the inability to transfer ownership rights in it

False

T or F: The majority shareholder of a corporation can act for the corporation and bind it by contract

False

when 2 corporations cease to exist and a new corp. is formed, it is called

a consolidation

which of the following is an advantage of the corporate form?

ability to attract large sums of capital

Melvin and Larry...

alien corporation

Which of the following is not one of the steps in the incorporation process

all of the above

The directors of a corp.

all of these

a corp. has the power

all of these

the application for incorporation filed with state gov. is termed

articles of incorporation

the right to increase the capital stock of the corp.

belongs to the shareholders alone

a certificate of incorp. is more commonly called a corporate_____

charter

A _______ corp. is private corp.

closely held

basic type of stock carrying the right to one vote per share is termed

common stock

enterprises in the form of ______ have the most sales

corporations

Typically corp. shareholders have limited liability....

if shareholders failed to keep corporate assets separate from their own.

Articles of incorporation are signed by individuals who are legally termed

incorporators

_______ is the process whereby all of the business assets are sold

liquidation

Having a ______ means owning less than 50%

minority position

Dexter & Desiree

nonprofit corporation

stock may or may not have ______

par value

businesses obtain the authority to exist in the corporate form by complying with one of the _______ incorp. statutes.

state

which of the following is not the corporate directors responsibility

to hold stock in the corp.

a public service corp. is also called a public ____

utility

Henry and Madelyn...

A corp. is subject to double taxation

A corp. doing business in 1 state but chartered in another is called

A foreign corp.

T or F: As a corporation is a legal entity separate and distinct from its owners and managers, it may continues indefinitely with new owners, managers, and employees and thereby enjoy perpetual life.

True

T or F: In general, a corporation can act for the corporation and bind it by contract

True

T or F: The directors have a fiduciary duty to the corp.

True

T or F: a corporation can make its own reasonable rules and regulations from the internal management of its affairs

True

under extreme conditions, courts will disregard the corp. limited liability protections and make the stockholders ________ in a a practice called "piercing the corporate veil".

personally responsible

shareholders do not have the right to

possess corporate property

The stockholders right right to purchases additional shares

preemptive right

Mazher invested $10,000 and purchased 200 shares of stock...

preferred stockholder

a shareholder that does not wish to attend meetings and vote in person ordinarily has the right to vote by _____

proxy

Corporations established for a gov. purpose are legally termed

public corporations

Electric, gas, and water companies are examples of

public service corporations