Exam 39: B: Corporate Formation and Financing

Discount Factory Outlets,Inc. ,issues bonds.Bonds

A corporation whose shares are not publicly traded is a partnership.

Bylaws can conflict with the incorporation statute or the articles of incorporation.

Each incorporator must have an interest in the corporation.

An agreement between shareholders to restrict the transfer of a closely held corporation's stock is illegal.

Omega Corporation makes and markets digital timers,clocks,and related products.Like other business corpo?rations,Omega issues securities to

A holding company is a company whose business activity consists of holding shares in another company.

Incredible eSales Corporation is a new Internet business.How can Incredible eSales obtain capi?tal to finance its operations?

Hailey and Ike hold the first organizational meeting of Java Kiosk Corporation.Probably the most important function of this meeting is

A corporation cannot be held liable for the criminal acts of its employees.

For liability purposes,some courts treat professional corporations somewhat like a partnership.

Corporate profits can be subject to double taxation.

A corporation is a legal entity created and recognized by federal law.

The articles of incorporation serve as a primary source of authority for a corporation.

Fact Pattern 39-1A Mountaintop Clearview Corporation authorizes Niles,its employee,to oversee its timber operation.In the course of his employment,Niles disposes of the operation's waste illegally.Orson is a Mountaintop shareholder. -Refer to Fact Pattern 39-1A.Liability for Niles's act most likely rests with Orson to

Digitech is a foreign corporation,which means that Digitech

Start-Up Corporation substantially complies with all conditions prece?dent to incorpo?ration.Start-Up has

A promoter is personally liable for a preincorporation contract until the corporation assumes liability.

Common stock provides a proportionate interest in the corporation with regard to control.

Convenience Mart,Inc. ,is a closely held corporation.Convenience Mart is