Exam 39: Corporate Formation and Financing

The articles of incorporation serve as a primary source of authority for the corporation's future organization and business functions.

A publicly held corporation is any corporation whose shares are publicly traded in a securities market.

The abbreviation "P.A." in the name "Conrad & Drake, Accountants, P.A." means that this organization is

Fitness Workout, Inc., is a small business. Siblings Grady and Heidi, and nine other members of their family, own all of its stock. Currently, the firm's income is taxed at the corporate level and, after being distributed to the family members, at the shareholder level. Can Fitness Workout retain its corporate status but oth?er?wise avoid this double taxation? If so, how?

When a corporation earns profits, it must pass them on to shareholders in the form of dividends.

Voting rights in a corporation apply only to the election of the firm's board of directors.

Bonds represent the borrowing of funds by firms.

Blair and Chanel are holders of common stock in Discount Retail Stores, Inc. Like other holders of common stock, they have a residual position in the overall financial structure of Discount Retail, because they

Preferred stock is an equity security with preferences.

Rhys owns Solar Fuel Corporation. Rhys uses Solar Fuel's funds to pay his personal expenses, creates Thermal Power Corporation to engage in the same business as Solar Fuel, transfers Solar Fuel's assets to Thermal Power, and petitions Solar Fuel into bankruptcy. This most likely warrants

The state can suspend the entity's corporate status until the taxes are paid or even dissolve the corporation for failing to pay taxes.

The shares of Home Mortgage Corporation are publicly traded in securities mar?kets. Home Mortgage Corporation is

Equestrian Stables Corporation's articles list an incorrect address for its incorporator. Under this circumstance, Equestrian Stables is most likely

Orel incorporates his business as Posts & Wire Corporation in Texas. He and his group of shareholders intend to make a profit from their sales of fencing materials. Posts & Wire is

Bay City Merchants Corporation has six shareholders, four of whom are members of the same family. All of Bay City's shareholders agree in writing to operate without shareholders' meetings. Under the Revised Model Business Corporation Act, this most likely warrants

Qiara is a holder of preferred stock in Rio Grande Irrigation & Development, Inc. Qiara has priority over holders of Rio common stock as to

Tech Personnel, Inc., is a corporation. Tech Personnel's implied powers enable it to

Dennis is a promoter for the soon-to-be-incorporated firm of eBroadcast Sports, Inc. Dennis signs a contract with Fitz & Geraldo, Accountants, to render their services before eBroadcast Sports is incorporated and for one year after the in?corporation. eBroadcast Sports is incorporated. Three months later, after Fitz & Geraldo has continued performing under the contract, the eBroadcast Sports board of directors tells the accountants that it is canceling their con?tract. Fitz & Geraldo files a suit against Dennis and eBroadcast Sports, alleging breach of contract. Will Fitz & Geraldo prevail?

Deepwater Dredging & Excavation holds itself out to others as being a corporation but makes no attempt to incorporate. Estuary Marina signs a contract with Deepwater that is not performed. Estuary Marina files a suit against the firm. The court will likely hold that Deepwater is

A corporation has perpetual existence unless the articles of incorporation state otherwise.