Question 1

Common stockholders receive dividends declared by the board of directors.

Accepted Answer

A) True 
 B)False

Question 2

A corporation in the United States that has been incorporated in another country is referred to as a(n)________ corporation.

Accepted Answer

A) foreign 
B) domestic 
C) onshore 
D) alien

Question 3

A long-term debt security that is secured by some form of collateral is referred to as a ________.

Accepted Answer

A) treasury share 
B) bond 
C) note 
D) debenture

Question 4

Corporations are not allowed to enter into contracts in their own name.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following can dismiss the existence of a corporation?

Accepted Answer

A) voluntary termination by shareholder 
B) death of a shareholder 
C) bankruptcy of a shareholder 
D) voluntary termination by the corporation's creditors

Question 6

Which of the following is true for a corporation's liability on the promoters' contracts if the corporation is never formed?

Accepted Answer

A) The corporation assumes liability of the promoters' contract automatically upon its creation. 
B) The promoter's liabilities are transferred to the board of directors of the corporation upon its formation. 
C) The promoter, corporation, and the third-party enter into a novation whereby liability is solely transferred to the corporation. 
D) The promoters have joint personal liability on the contract unless the third party specifically exempts them from such liability.

Question 7

The articles of incorporation must contain the name and address of every incorporator.

Accepted Answer

A) True 
 B)False

Question 8

A contract between a corporation and a holder that contains the terms of a debt security is known as a(n)________.

Accepted Answer

A) bond 
B) indenture 
C) debenture 
D) liquidation

Question 9

Give an account of publicly held and closely held corporation.

Accepted Answer

The answer of Give an account of publicly held and...

Question 10

The earnings of a not-for-profit corporation are distributed among its members.

Accepted Answer

A) True 
 B)False

Question 11

Bylaws of a corporation must be filed with a government official.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following must necessarily be met for a corporation to elect as a statutory close corporation?

Accepted Answer

A) The corporation must have 100 or more shareholders. 
B) The corporation must have 50 or fewer shareholders. 
C) The corporation must contain a board of directors. 
D) The corporation must have a set of bylaws.

Question 13

Which of the following is true of a C Corporation?

Accepted Answer

A) It doesn't pay tax at the corporate level. 
B) Shareholders of such a corporation don't pay tax on their dividends. 
C) It must have more than 100 shareholders. 
D) Nonresident aliens cannot be shareholders.

Question 14

A detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing the business and the affairs of the corporation are referred to as ________.

Accepted Answer

A) ultra vires rules 
B) articles of incorporation 
C) bylaws 
D) corporation codes

Question 15

Which of the following elects members of the board of directors for a corporation?

Accepted Answer

A) the CEO 
B) corporate officers 
C) shareholders 
D) employees

Question 16

A(n)________ is the basic governing documents of a corporation which must be filed with the secretary of state of the state of incorporation.

Accepted Answer

A) debt security 
B) debenture 
C) certificate of authority 
D) articles of incorporation

Question 17

An S corporation cannot have more than 100 shareholders.

Accepted Answer

A) True 
 B)False

Question 18

Only outstanding shares have the right to vote.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true for a corporation's incorporation in a state?

Accepted Answer

A) Domestic corporations can incorporate into only one state. 
B) Domestic corporations can incorporate into all states that it conducts business in. 
C) Alien corporations can only incorporate into one state. 
D) Foreign corporations can incorporate into more than one state.

Question 20

Owners of a corporation who elect the board of directors and vote on fundamental changes in the corporation are known as ________.

Accepted Answer

A) spectators 
B) shareholders 
C) electors 
D) associates

Exam 36: Corporate Formation and Financing

Common stockholders receive dividends declared by the board of directors.

A corporation in the United States that has been incorporated in another country is referred to as a(n) ________ corporation.

A long-term debt security that is secured by some form of collateral is referred to as a ________.

Corporations are not allowed to enter into contracts in their own name.

Which of the following can dismiss the existence of a corporation?

Which of the following is true for a corporation's liability on the promoters' contracts if the corporation is never formed?

The articles of incorporation must contain the name and address of every incorporator.

A contract between a corporation and a holder that contains the terms of a debt security is known as a(n) ________.

Give an account of publicly held and closely held corporation.

The earnings of a not-for-profit corporation are distributed among its members.

Bylaws of a corporation must be filed with a government official.

Which of the following must necessarily be met for a corporation to elect as a statutory close corporation?

Which of the following is true of a C Corporation?

A detailed set of rules adopted by the board of directors after a corporation is incorporated that contains provisions for managing the business and the affairs of the corporation are referred to as ________.

Which of the following elects members of the board of directors for a corporation?

A(n) ________ is the basic governing documents of a corporation which must be filed with the secretary of state of the state of incorporation.

An S corporation cannot have more than 100 shareholders.

Only outstanding shares have the right to vote.

Which of the following is true for a corporation's incorporation in a state?

Owners of a corporation who elect the board of directors and vote on fundamental changes in the corporation are known as ________.