Question 1

Which of the following is not a general corporate power typically granted by incorporation statutes, including the RMBCA?

Accepted Answer

A) To have a corporate seal 
B) To own and vote shares of other entities 
C) To make donations for charitable or educational purposes 
D) All of these are typical corporate powers. 
A) To have a corporate seal 
B) To own and vote shares of other entities 
C) To make donations for charitable or educational purposes 
D) All of these are typical corporate powers. D

Question 2

A postincorporation subscription is:

Accepted Answer

A) like a preincorporation subscription in that the subscriber may withdraw the offer to enter into the subscription any time before the corporation accepts it. 
B) treated as a contract between the subscriber and the corporation. 
C) not recognized under the RMBCA. 
D) defined under the RMBCA as a contract between all subscribers. 
A) like a preincorporation subscription in that the subscriber may withdraw the offer to enter into the subscription any time before the corporation accepts it. 
B) treated as a contract between the subscriber and the corporation. 
C) not recognized under the RMBCA. 
D) defined under the RMBCA as a contract between all subscribers. B

Question 3

Under the RMBCA, a corporation can act as an incorporator of another corporation.

Accepted Answer

A) True 
 B)False  True

Question 4

A corporation is considered a citizen:

Accepted Answer

A) under the Fourteenth Amendment's "privileges or immunities" clause. 
B) of the state of its incorporation or where it has its principal office. 
C) of all states where it does business. 
D) All of these. 
A) under the Fourteenth Amendment's "privileges or immunities" clause. 
B) of the state of its incorporation or where it has its principal office. 
C) of all states where it does business. 
D) All of these.

Question 5

Under the Model Act, the bylaws may contain any provision for managing the business and regulating the affairs of the corporation as long as it is not contrary to or inconsistent with the law or articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 6

The person who signs and files the articles of incorporation is the:

Accepted Answer

A) promoter. 
B) incorporator. 
C) subscriber. 
D) majority stockholder. 
A) promoter. 
B) incorporator. 
C) subscriber. 
D) majority stockholder.

Question 7

If a foreign corporation wishes to avoid transacting business in Arkansas, it would be careful NOT to do which of the following in Arkansas?

Accepted Answer

A) Own a piece of real estate on which it may build in the future 
B) Own a building in which to warehouse stock 
C) Maintain a bank account 
D) None of these 
A) Own a piece of real estate on which it may build in the future 
B) Own a building in which to warehouse stock 
C) Maintain a bank account 
D) None of these

Question 8

A corporation must keep its funds separate from those of its shareholders.

Accepted Answer

A) True 
 B)False

Question 9

The doctrine of corporation by estoppel is distinct from that of corporation de facto; estoppel does not create a corporation.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following may influence a promoter to choose to incorporate in a particular state?

Accepted Answer

A) Its restrictions on dividend payments 
B) Its tax on corporate earnings 
C) The rights granted to shareholders 
D) All of these 
A) Its restrictions on dividend payments 
B) Its tax on corporate earnings 
C) The rights granted to shareholders 
D) All of these

Question 11

"Doing business" within a particular state will subject a foreign corporation to the litigation, regulation, and taxation of that state.

Accepted Answer

A) True 
 B)False

Question 12

Under the Statutory Close Corporation Supplement to the MBCA, a close corporation must have bylaws on file with the Office of the Secretary of State or some other public office.

Accepted Answer

A) True 
 B)False

Question 13

The Internal Revenue Service allows taxation of certain corporations to be similar to that of partnerships.

Accepted Answer

A) True 
 B)False

Question 14

Under the RMBCA, a newly formed corporation need not hold an organizational meeting.

Accepted Answer

A) True 
 B)False

Question 15

Under the RMBCA, the articles of incorporation must include all EXCEPT which one of the following?

Accepted Answer

A) The number of authorized shares 
B) The name of the registered agent 
C) The names of the initial shareholders 
D) The address of each incorporator 
A) The number of authorized shares 
B) The name of the registered agent 
C) The names of the initial shareholders 
D) The address of each incorporator

Question 16

Dickens Corporation, incorporated in Delaware, opens a warehouse in a western state from which it ships goods.If Dickens does not have a certificate of authority to do business within the western state:

Accepted Answer

A) it will face no sanctions or penalties. 
B) the corporation will be shut down. 
C) the corporation's officers and directors may be held personally liable on contracts made within the state. 
D) Any of these may happen. 
A) it will face no sanctions or penalties. 
B) the corporation will be shut down. 
C) the corporation's officers and directors may be held personally liable on contracts made within the state. 
D) Any of these may happen.

Question 17

Under the RMBCA, a pre-incorporation subscription may be revoked at any time without the consent of the subscribers.

Accepted Answer

A) True 
 B)False

Question 18

The modern approach follows the common law rule in holding that a corporation cannot commit a criminal act.

Accepted Answer

A) True 
 B)False

Question 19

Under the RMBCA, the filing of the articles of incorporation by the Secretary of State is conclusive proof that the incorporators have satisfied all conditions precedent to incorporation so that a shareholder or creditor would be unable to challenge the existence of the corporation.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following names would NOT be permitted under most general incorporation statutes?

Accepted Answer

A) Acme Ltd. 
B) Acme Co. 
C) Acme Inc. 
D) Acme 
A) Acme Ltd. 
B) Acme Co. 
C) Acme Inc. 
D) Acme

Exam 33: Nature, Formation, and Powers

Which of the following is not a general corporate power typically granted by incorporation statutes, including the RMBCA?

A postincorporation subscription is:

Under the RMBCA, a corporation can act as an incorporator of another corporation.

A corporation is considered a citizen:

Under the Model Act, the bylaws may contain any provision for managing the business and regulating the affairs of the corporation as long as it is not contrary to or inconsistent with the law or articles of incorporation.

The person who signs and files the articles of incorporation is the:

If a foreign corporation wishes to avoid transacting business in Arkansas, it would be careful NOT to do which of the following in Arkansas?

A corporation must keep its funds separate from those of its shareholders.

The doctrine of corporation by estoppel is distinct from that of corporation de facto; estoppel does not create a corporation.

Which of the following may influence a promoter to choose to incorporate in a particular state?

"Doing business" within a particular state will subject a foreign corporation to the litigation, regulation, and taxation of that state.

Under the Statutory Close Corporation Supplement to the MBCA, a close corporation must have bylaws on file with the Office of the Secretary of State or some other public office.

The Internal Revenue Service allows taxation of certain corporations to be similar to that of partnerships.

Under the RMBCA, a newly formed corporation need not hold an organizational meeting.

Under the RMBCA, the articles of incorporation must include all EXCEPT which one of the following?

Dickens Corporation, incorporated in Delaware, opens a warehouse in a western state from which it ships goods.If Dickens does not have a certificate of authority to do business within the western state:

Under the RMBCA, a pre-incorporation subscription may be revoked at any time without the consent of the subscribers.

The modern approach follows the common law rule in holding that a corporation cannot commit a criminal act.

Under the RMBCA, the filing of the articles of incorporation by the Secretary of State is conclusive proof that the incorporators have satisfied all conditions precedent to incorporation so that a shareholder or creditor would be unable to challenge the existence of the corporation.

Which of the following names would NOT be permitted under most general incorporation statutes?

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.