Business Law Chapter 43
_________ of a corporation may occur when management is deadlocked and the deadlock cannot be broken by the shareholders.
D. Judicial Dissolution
Nonprofit corporations:
D. all of the above
If there is a consolidation of corporations A, B, and C:
D. corporations A, B, and C cease to exist, and a new corporation with the property and assets of the old corporations comes into being.
Which of the following will affect the perpetual life of a corporation?
D. neither a or b
"Conglomerate" describes the relationship of equal companies engaged in similar fields of business activity.
False
A corporate seal is required in order for the corporation to enter into a binding contract.
False
A corporation may properly exist without a name.
False
A de facto corporation is not accorded legal recognition due to some recognized defect in its incorporation.
False
A holder of a single share of stock who objects to a merger has the power to stop the merger.
False
A quasi-public corporation is one that is organized for charitable or benevolent purposes.
False
Bylaws are typically adopted by the managers of a corporation
False
Corporations may avoid liability for the obligations of a predecessor corporation by treating a consolidation or merger as a sale of assets.
False
Stock that is reacquired by the corporation that issued it is commonly called "boomerang" stock.
False
Subchapter S corporations have the benefits of limited liability as in partnerships and are taxed as corporations.
False
The shares of a close corporation are always held by a single individual.
False
A corporation must have:
A. a name
An enterprise that conducts business following a merger or consolidation succeeds to:
A. all of the rights of the predecessor
A corporation that does business in the state in which it was created is called a(n):
A. domestic corporation
The Revised Model Business Corporation Act:
A. has eliminated the certificate of incorporation
In states that have adopted the Revised Model Business Corporation Act, the secretary of state may commence proceedings to administratively dissolve a corporation under all but which of the following circumstances?
A. the corporation adopts more than one business purpose.
If two firms consolidate, the new corporation usually succeeds to the rights, powers and immunities of its component parts.
True
In a merger or consolidation, the surviving corporation generally succeeds to all the rights and property of the predecessor.
True
Most states have a general corporation code, and anyone who satisfies code requirements and files the necessary papers with the government may automatically become a corporation.
True
Shareholders ordinarily cannot be sued for corporate liabilities.
True
Subject to constitutional limitations, corporations may be regulated by statutes.
True
The corporate form of business continues regardless of changes in stock ownership.
True
Under the Revised Model Business Corporation Act (RMBCA), corporate existence begins when the articles of incorporation are filed with the secretary of state.
True
When a corporation acts in excess of or beyond the scope of its powers, the corporation's act is described as "ultra vires."
True
Which of the following is a correct statement concerning the incorporation process?
B. The incorporation process is essentially a matter of filing the correct papers and fees with the designated government official.
What is not a correct statement concerning promoters?
B. Two (2) or more promoters are required to form a corporation
A successor enterprise is not subject to the contract obligations of the former business if:
B. a corporation merely purchases the assets of another business.
When two corporations merge:
B. one of the corporations absorbs the other.
In a merger situation, what is the right of a dissenting shareholder?
B. to have their shares appraised and purchased by the corporation.
If a wire manufacturing company owned a mill to produce the metal used in making the wire, this relationship between the companies would be best be described as:
C. an integrated industry.
The rules and regulations enacted by a corporation to govern the affairs of the corporation and its shareholders, directors and officers are called:
C. bylaws
Where a corporation is properly formed, it is called a corporation:
C. de jure.
A public corporation is:
C. established for governmental purposes and for the administration of public affairs
After a corporate charter has been forfeited, the owners and officers of the dissolved corporation are __________ shielded from personal liability by using the corporate name when making contracts.
C. not
Under recent statutes, the articles of incorporation must contain all of the following except the:
C. purpose for which the corporation is organized.
For the purpose of determining the right to bring a lawsuit in 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.
True
A California corporation is a foreign corporation with respect to the remaining forty-nine (49) states of the United States.
True
A corporation is an artificial person that is created by governmental action.
True
A corporation is considered a person for purposes of the due process clause of the United States Constitution.
True
A corporation may be an incorporator of another corporation.
True
A corporation may be judicially dissolved when its management is deadlocked and the deadlock cannot be broken by the shareholders.
True
A corporation may exercise its power to borrow money by issuing bonds.
True
A merger is subject to antitrust law, while a consolidation is not.
True
Because nonprofit corporations have a more restricted range of powers than business corporations, actions not authorized by the charters of nonprofit corporations are more likely to be found ultra vires.
True
Corporations come into existence as the result of the activities of one or more persons known as promoters.
True
Debts of a corporation are not the debts of the persons running the corporation or owning shares of stock in it.
True