Question 1

Do corporations have protection under the First Amendment for political speech?

Accepted Answer

A)  No because a corporation is not a person. 
B)  No because the government has a substantial governmental interest in regulating corporate speech. 
C)  Yes. 
D)  Yes unless someone is offended by the speech. 
A)  No because a corporation is not a person. 
B)  No because the government has a substantial governmental interest in regulating corporate speech. 
C)  Yes. 
D)  Yes unless someone is offended by the speech. C

Question 2

Corporate formalities include all of the following except

Accepted Answer

A)  Filing annual reports. 
B)  Disclosing information to shareholders. 
C)  Keep the corporate bylaws up to date. 
D)  Find investors. 
A)  Filing annual reports. 
B)  Disclosing information to shareholders. 
C)  Keep the corporate bylaws up to date. 
D)  Find investors. D

Question 3

All of the following are methods a corporation can capitalize except

Accepted Answer

A)  Borrow money. 
B)  Sell equity in their operations. 
C)  Require the shareholder to invest more money to keep their shares. 
D)  Sell bonds 
A)  Borrow money. 
B)  Sell equity in their operations. 
C)  Require the shareholder to invest more money to keep their shares. 
D)  Sell bonds C

Question 4

In a minority of the states, the articles of incorporation are called the

Accepted Answer

A)  Bylaws 
B)  Certificate 
C)  Corporate charter 
D)  Organization act 
A)  Bylaws 
B)  Certificate 
C)  Corporate charter 
D)  Organization act

Question 5

What is an advantage of a Subchapter S corporation that a standard corporation does not have?

Accepted Answer

A)  It does not face double taxation. 
B)  It does not having any filing requirement. 
C)  The board does not have any fiduciary duties. 
D)  It is inexpensive and easy to start up and run. 
A)  It does not face double taxation. 
B)  It does not having any filing requirement. 
C)  The board does not have any fiduciary duties. 
D)  It is inexpensive and easy to start up and run.

Question 6

Space X filed its articles of incorporation in Delaware, but its principal place of business is in Texas. In which state is Space X a domestic corporation?

Accepted Answer

A)  Delaware 
B)  Texas 
C)  Both Texas and Delaware 
D)  Whichever state the promoters choose as the domestic state. 
A)  Delaware 
B)  Texas 
C)  Both Texas and Delaware 
D)  Whichever state the promoters choose as the domestic state.

Question 7

Natural Corporation often fails to file the annual reports required by law. They also have failed to conduct annual shareholders meeting and their bylaws have been out of date and not followed for about four years. What could be the result of this malfeasance?

Accepted Answer

A)  Nothing. Those actions are voluntary. 
B)  The shareholders could lose their investments. 
C)  The courts could file criminal charges. 
D)  The corporate veil could be pierced. 
A)  Nothing. Those actions are voluntary. 
B)  The shareholders could lose their investments. 
C)  The courts could file criminal charges. 
D)  The corporate veil could be pierced.

Question 8

Chaplan Corporation is a privately held corporation that wishes to offer ownership interests to the general public and commercial investors in order to generate more capital. This process is called

Accepted Answer

A)  Initial public offerings 
B)  Public stock sales 
C)  Open stock offerings 
D)  Unlimited stock offerings 
A)  Initial public offerings 
B)  Public stock sales 
C)  Open stock offerings 
D)  Unlimited stock offerings

Question 9

The liability protection shareholders, directors, and officers of a corporation have from personal liability in case the corporation runs up large debts or suffers some liability is called

Accepted Answer

A)  Cone of silence 
B)  Corporate veil 
C)  Liability shield 
D)  Bubble of protection 
A)  Cone of silence 
B)  Corporate veil 
C)  Liability shield 
D)  Bubble of protection

Question 10

The expiration date of a corporate bond is also called its __________.

Accepted Answer

A)  Date of return 
B)  Maturity date 
C)  Amortization date 
D)  Fulfillment date 
A)  Date of return 
B)  Maturity date 
C)  Amortization date 
D)  Fulfillment date

Question 11

Jeff files the articles of incorporation to start BluSky Inc. What will be the next step?

Accepted Answer

A)  Sell shares of stocks on the New York Stock Exchange 
B)  The principals will hold an organizational meeting to resolve any pending issues. 
C)  The court will declare the corporate existence. 
D)  The shareholders will create the bylaws. 
A)  Sell shares of stocks on the New York Stock Exchange 
B)  The principals will hold an organizational meeting to resolve any pending issues. 
C)  The court will declare the corporate existence. 
D)  The shareholders will create the bylaws.

Question 12

Owners of nonvoting stock who receive a share of the corporate profits have received what is called a

Accepted Answer

A)  Profit-share 
B)  Income distribution 
C)  Dividend 
D)  Gratuity 
A)  Profit-share 
B)  Income distribution 
C)  Dividend 
D)  Gratuity

Question 13

A fictitious legal entity that exists as an independent individual separate from its owners is called a

Accepted Answer

A)  Partnership 
B)  LLP 
C)  LLC 
D)  Corporation 
A)  Partnership 
B)  LLP 
C)  LLC 
D)  Corporation

Question 14

Which body of a corporation has the duty to appoint and to remove the corporation's officers?

Accepted Answer

A)  The shareholders 
B)  The executive officers 
C)  The principals 
D)  The board of directors 
A)  The shareholders 
B)  The executive officers 
C)  The principals 
D)  The board of directors

Question 15

The United States Postal System is an example of what type of corporation?

Accepted Answer

A)  Nonprofit 
B)  Public 
C)  Professional 
D)  Publicly traded 
A)  Nonprofit 
B)  Public 
C)  Professional 
D)  Publicly traded

Question 16

A corporate bond issued in the amount of $500,000 is called a

Accepted Answer

A)  Baby bond 
B)  Micro bond 
C)  Small bond 
D)  Miniature bond 
A)  Baby bond 
B)  Micro bond 
C)  Small bond 
D)  Miniature bond

Question 17

Which entity wrote the Revised Model Business Corporation Act (RMBCA)?

Accepted Answer

A)  The federal legislature 
B)  The federal Commerce Commission 
C)  The American Law Institute 
D)  The state legislatures 
A)  The federal legislature 
B)  The federal Commerce Commission 
C)  The American Law Institute 
D)  The state legislatures

Question 18

Which statement below is correct about a promoter's liability?

Accepted Answer

A)  It ceases to exist at the moment the corporation is formed. 
B)  It continues for the duration of the existence of the corporation. 
C)  It can only be terminated by judicial decree. 
D)  It never can be terminated. 
A)  It ceases to exist at the moment the corporation is formed. 
B)  It continues for the duration of the existence of the corporation. 
C)  It can only be terminated by judicial decree. 
D)  It never can be terminated.

Question 19

A person who performs pre-incorporation duties on behalf of the forming corporation is called a __________.

Accepted Answer

A)  Promoter 
B)  Incorporator 
C)  Venture capitalist 
D)  Principal 
A)  Promoter 
B)  Incorporator 
C)  Venture capitalist 
D)  Principal

Question 20

Which statement is accurate about Delaware as it relates to taxation treatment of out of state corporations that incorporate in Delaware?

Accepted Answer

A)  They face no taxes. 
B)  They face very favorable tax treatment. 
C)  Delaware does not allow double taxation of corporations. 
D)  Unless they sell products and services in Delaware, they may not benefit at all from Delaware tax treatment. 
A)  They face no taxes. 
B)  They face very favorable tax treatment. 
C)  Delaware does not allow double taxation of corporations. 
D)  Unless they sell products and services in Delaware, they may not benefit at all from Delaware tax treatment.

Exam 30: Corporations: Formation and Organization

Do corporations have protection under the First Amendment for political speech?

Corporate formalities include all of the following except

All of the following are methods a corporation can capitalize except

In a minority of the states, the articles of incorporation are called the

What is an advantage of a Subchapter S corporation that a standard corporation does not have?

Space X filed its articles of incorporation in Delaware, but its principal place of business is in Texas. In which state is Space X a domestic corporation?

Natural Corporation often fails to file the annual reports required by law. They also have failed to conduct annual shareholders meeting and their bylaws have been out of date and not followed for about four years. What could be the result of this malfeasance?

Chaplan Corporation is a privately held corporation that wishes to offer ownership interests to the general public and commercial investors in order to generate more capital. This process is called

The liability protection shareholders, directors, and officers of a corporation have from personal liability in case the corporation runs up large debts or suffers some liability is called

The expiration date of a corporate bond is also called its __________.

Jeff files the articles of incorporation to start BluSky Inc. What will be the next step?

Owners of nonvoting stock who receive a share of the corporate profits have received what is called a

A fictitious legal entity that exists as an independent individual separate from its owners is called a

Which body of a corporation has the duty to appoint and to remove the corporation's officers?

The United States Postal System is an example of what type of corporation?

A corporate bond issued in the amount of $500,000 is called a

Which entity wrote the Revised Model Business Corporation Act (RMBCA)?

Which statement below is correct about a promoter's liability?

A person who performs pre-incorporation duties on behalf of the forming corporation is called a __________.

Which statement is accurate about Delaware as it relates to taxation treatment of out of state corporations that incorporate in Delaware?

Legal Foundations and Thinking Strategically

Business, Societal, and Ethical Contexts of Law

Business and the Constitution

The American Judicial System, Jurisdiction, and Venue

Resolving Disputes: Litigation and Alternative Dispute Resolution

Contracts: Overview, Definition, Categories, and Source of Law

Mutual Assent: Agreement and Consideration

Capacity and Legality

Enforceability

Performance

Breach and Remedies

Contracts for the Sale of Goods: Overview of Article 2

Sales Contracts: Agreement, Consideration, and the Statute of Frauds

Title, Allocation of Risk, and Insurable Interest

Performance and Cure in Sales Contracts

Breach and Remedies in a Sales Transaction

UCC Article 2A: Lease Contracts

Sales Warranties

Definition, Creation, and Categories of Negotiable Instruments

Negotiation, Endorsements, and Holder in Due Course

Liability, Defenses, and Discharge

Checks, Deposits, and Financial Institutions

Secured Transactions

Creditors Rights

Alternatives for Insolvent Borrowers

Bankruptcy

Choice of Business Entity and Sole Proprietorships

Partnerships

Limited Liability Partnerships and Limited Liability Companies

Corporate Transactions: Acquisitions and Mergers

Overview of the Securities Market: Definition, Categories, and Regulation

Regulation of Issuance: The Securities Act of 1933

Regulation of Trading: The Securities Exchange Act of 1934

Regulation of Corporate Governance

Regulation of Financial Markets

Agency Formation, Categories, and Authority

Duties and Liabilities of Principals and Agents

Employment at Will

Employment Regulation and Labor Law

Employment Discrimination

Torts and Products Liability

Administrative Law

Consumer Protection

Criminal Law and Procedure

Insurance Law

Environmental Law

Personal Property, Real Property, and Land Use Law

Wills, Trusts, and Estates

Intellectual Property

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