Business Law II Chapter 30

Four brothers -- Alex, Ben, Clem and Donald -- formed a corporation called Four Brothers, Inc. Alex, Ben and Clem all live in New York State but Donald is a permanent resident of Canada. All of the corporate stock is equally divided and owned by the four brothers. The corporation's stock is not available to the public for purchase. Four Brothers, Inc. is most likely a(n) ___________

Close corporation

A corporation formed in one State of the U.S. has an automatic right to do business in any other State in the U.S. Select one: True False

False

A foreign corporation is a corporation formed in another country. Select one: True False

False

An "ultra vires" act is an act conducted under the power granted to all corporations by the laws of the State in which the corporation was formed. Select one: True False

False

If all of the legal procedures to form a corporation are not followed precisely, courts will never attribute corporate status or existence to the improperly formed corporation under any circumstances. Select one: True False

False

The only way ABC Corporation can acquire control over XYZ Corporation is if ABC purchases all or substantially all of the assets of XYZ Corporation. Select one: True False

False

The owners of a corporation are called "members". Select one: True False

False

The terms "foreign corporation" and "alien corporation" have the same meaning. Select one: True False

False

he Secretary of State issues a "certificate of incorporation" after the incorporators file a document called the Articles of Organization. Select one: True False

False

A corporation's day-to-day business operations are typically handled by ______________

Officers

A C corporation's income is taxed twice (on the shareholder level AND on the corporate level); but, an S corporation's income is taxed only on the shareholder level. Select one: True False

True

Akemi, Mike and Yolanda are the only shareholders in ABC Corporation. ABC Corporation has issued a total of 200 shares -- Akemi got 100 shares, Mike got 99 shares and Yolanda got 1 share. Who are the owners of ABC Corporation? Select one: a. Akemi, Mike and Yolanda b. only Akemi c. only Akemi and Mike d. The State where ABC was formed owns the ABC Corporation

a. Akemi, Mike and Yolanda

A shareholder of the corporation has limited personal liability for debts of the corporation. This means that if a corporation does not pay its debts and the corporation is successfully sued, the shareholder could lose Select one: a. only the amount of money the shareholder has invested in the corporation b. the money he/she has invested in the corporation AND any other property owned by the shareholder so that it can be sold and the money received be used to pay off the corporation's debts c. nothing

a. only the amount of money the shareholder has invested in the corporation

Corporations sell securities to raise money for the corporation. Securities include all of the following EXCEPT Select one: a. common stock b. bylaws c. bonds d. preferred stock

b. bylaws

Corporation A and Corporation B consolidate to form an entirely new organization, Corporation C. In the process, A and B both terminate, and C comes into existence as a new entity. This is referred to as a Select one: a. joint venture b. commingling c. merger d. consolidation

d. consolidation

Profits of a corporation that are distributed to the corporation's shareholders are called Select one: a. liquidated assets b. preferences c. appraisal rights d. dividendes

d. dividendes

Ace, Inc. is a corporation originally formed in Vermont that does business in New York State. New York State would classify Ace, Inc. as a(n) Select one: a. domestic corporation b. corporation by estoppel c. alien corporation d. foreign corporation

d. foreign corporation

The number of business entities listed in the name database of New York State Department of State whose name starts with "Adirondack" is Select one: a. more than 10 but less than 100 b. more than 100 but less than 200 c. more than 200 but less than 300 d. more than 500

d. more than 500

Under the laws of most States, the life span of a business corporation is Select one: a. 10 years b. 20 years c. 5 years d. perpetual (i.e. forever)

d. perpetual (i.e. forever)

McDonald's, Inc. is not a close corporation; its stock can be bought by the general public on the stock exchange. A voluntary dissolution of the McDonald's corporation can be brought about if a vote is taken to dissolve the corporation and it is passed by Select one: a. two-thirds vote of all shareholders b. one-fourth vote of all shareholders c. a majority (i.e. by more than half) vote of all shareholders d. unanimous (i.e. by everyone) vote of all shareholders

d. unanimous (i.e. by everyone) vote of all shareholders