CH. 15 T/F

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"Piercing the corporate veil" means revealing to shareholders the internal rules of corporate management.

F

A business incorporated in one state has an automatic right to do business in any other state.

F

A director is elected by a majority vote of the other members of the board.

F

A promoter is not personally liable for a preincorporation contract.

F

A shareholder is not an "owner" of a corporation.

F

A stock warrant is a distribution of corporate profits or income.

F

A voting trust is an illegal restraint of shareholders' power.

F

An incorporator must have an interest in a corporation to file its articles of incorporation.

F

Any change in shareholders affects the continued existence of a corporation.

F

Any power expressly set out in the bylaws of a corporation is ultra vires.

F

Corporate bylaws must be approved by the appropriate state official before the corporation's first organizational meeting.

F

Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.

F

Directors are rarely compensated and cannot set their own compensation.

F

For action to be taken during a shareholders' meeting, a forum must be present.

F

In determining which form of business organization is most appropriate, the prime consideration is what would look good on the firm's Web site.

F

No state permits a corporate board to have fewer than three directors.

F

Preemptive rights entitle shareholders to bring a derivative suit against the corpora¬tion.

F

Professionals can avoid liability for their acts of malpractice simply by incorporating as a professional corporation.

F

Shareholders own a corporation and the right to manage it.

F

Shares issued for more than fair market value are known as watered stock.

F

The "minimum contacts" rule determines in which state a corporation should be incorporated.

F

There is a uniform body of national corporate law.

F

To vote their shares, shareholders must attend a shareholders' meeting and vote in person.

F

Unlike a director, an officer is not expected to be informed on corporate matters.

F

When a corporation is dissolved, its assets are distributed to its shareholders in proportion to the prices paid for the shares owned by each.

F

A business that holds itself out as being a corporation may not be able to deny corporate status, even if it makes no attempt to incorporate.

T

A corporation has perpetual existence in most states unless stated other¬wise in the ar¬ti¬cles of incorporation.

T

A corporation's internal management structure is described in its articles or bylaws.

T

A shareholder in a professional corporation can be liable for malpractice arising from the rendering of professional services.

T

Damages awarded in a shareholder's derivative suit go into the corporation's treasury.

T

Directors are required to exercise a reasonable amount of supervision over the corporate officers.

T

Express powers of a corporation can be found in the law of the state of incorporation.

T

Incorporators can appoint a corporation's first board of directors.

T

Only certain funds are legally available for paying dividends.

T

The law of the state of in¬corporation may restrict the implied powers of a corporation.

T


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