Deck 14: Corporate Dissolution

Question 1

When a creditor of a dissolving corporation receives proper notice of the dissolution, but fails to make a claim as directed in the notice, that claim against the corporation may be barred.

Answer 1

True

Question 2

Depending on the provisions of the pertinent state statutes, corporations may be liquidated either before or after the articles of dissolution are filed.

Answer 2

True

Question 3

A(n) is not a type of involuntary dissolution.

A) administrative dissolution
B) judicial proceeding by minority shareholders
C) judicial proceeding by creditors
D) judicial proceeding by majority shareholders

Answer 3

D

Question 4

Corporations that give notice of dissolution to creditors are afforded the same protection from future claims as the dissolving corporation that does not give notice.

Question 5

must be filed with the secretary of state or other appropriate state authority to dissolve the corporation in states following the Model Business Corporation Act.

A) A notice of intent to dissolve
B) A notice to creditors
C) Articles of dissolution
D) A revocation of articles of incorporation

Question 6

In states following the Model Business Corpo- ration Act, a notice of revocation of dissolution may be filed with the secretary of state to re- voke the dissolution of a corporation.

Question 7

A voluntary dissolution is approved by the

A) shareholders of the corporation.
B) officers of the corporation.
C) creditors of the corporation.
D) president of the corporation.

Question 8

All voluntary dissolutions are considered to be judicial dissolutions.

Question 9

The dissolution of a corporation that has not issued stock may be approved by the incorpora- tors or by the board of directors, if one was named in the articles of incorporation.

Question 10

The activities performed when winding up the affairs of a dissolving corporation do not include

A) paying the outstanding debts of the cor- poration.
B) collecting the assets of the corporation.
C) distributing the remaining assets of the corporation to the shareholders.
D) filing articles of dissolution with the Securities and Exchange Commission.

Question 11

The shareholders of a dissolved corporation have no responsibility for any claims left un- paid by the corporation when it is dissolved.

Question 12

Statutes of many states will shorten the time for valid post-dissolution claims if the dis- solving corporation

A) sends written notice to all known creditors and publishes notice in a legal newspaper.
B) holds a meeting of creditors.
C) files a notice to creditors with the secre- tary of state.
D) sends notice to all shareholders.

Question 13

In several states, a(n) is filed with the secretary of state prior to filing the arti- cles of dissolution.

A) statement of intent to dissolve
B) liquidation notice
C) articles of liquidation document
D) certificate of withdrawal

Question 14

The dissolution of a corporation by the state of the corporation's domicile, usually for failing to pay income taxes or file annual reports, is referred to as

A) voluntary dissolution.
B) procedural dissolution.
C) administrative dissolution.
D) state dissolution.

Question 15

It is possible for a corporation to be dissolved by a minority of its shareholders.

Question 16

When grounds for an administrative dissolution are found, the corporation is immediately con- sidered to be dissolved.

Question 17

A corporate dissolution

A) terminates the corporate existence for all purposes.
B) terminates the corporate existence except for certain purposes such as winding up the affairs of the corporation and liquidat- ing the corporation's assets.
C) cancels the debts and obligations of the corporation.
D) is always involuntary.

Question 18

The process of paying the debts of the corpo- ration and distributing its assets is often re- ferred to as the corporate

A) distribution.
B) dissolution.
C) liquidation.
D) termination.

Question 19

A(n) is a dissolution that is initiat- ed by creditors of an insolvent corporation, instead of by the board of directors.

A) creditors' dissolution
B) voluntary dissolution
C) administrative dissolution
D) involuntary dissolution

Question 20

Articles of dissolution are filed with the secre-
tary of state to dissolve a corporation.