Question 1

Dissolution of a corporation can be initiated by

Accepted Answer

A)  corporate ethics groups. 
B)  competitors. 
C)  customers, suppliers, and other corporate stakeholders. 
D)  a court order.

Question 2

In a consolidation, the newly formed corporation acquires all of the assets and liabilities of both corporations that were consolidated.

Accepted Answer

A) True 
 B)False

Question 3

All states have statutes authorizing consolidations of domestic corporations.

Accepted Answer

A) True 
 B)False

Question 4

Appraisal rights do not normally apply to short-form mergers.

Accepted Answer

A) True 
 B)False

Question 5

Burgers Inc. merges with Chicken Corporation with Burgers as the surviving corporation. After the merger, the shareholders of Chicken

Accepted Answer

A)  will be paid out or will own shares of Burgers. 
B)  will be creditors of Burgers. 
C)  will lose their investment value in Chicken. 
D)  will have the option of becoming employees of Burgers in order to receive their value.

Question 6

Fact Pattern 31-2 Dynamo Corporation combines its assets and liabilities with those of Energy Company to form Fuel Inc. Dynamo and Energy cease to exist.
Refer to Fact Pattern 31-2. The formation of Fuel Inc. is

Accepted Answer

A)  a takeover. 
B)  a consolidation. 
C)  a liquidation. 
D)  a share exchange.

Question 7

One corporation that owns all of the shares of another corporation is a subsidiary corporation.

Accepted Answer

A) True 
 B)False

Question 8

When dissolution takes place by voluntary action, the members of the board of directors act as trustees of the corporate assets.

Accepted Answer

A) True 
 B)False

Question 9

Dissolution of a corporation can be brought about by the shareholders' majority vote to initiate dissolution proceedings.

Accepted Answer

A) True 
 B)False

Question 10

Garden Company and Home Corporation make a plan to consolidate. Once approved, the plan likely will be filed with

Accepted Answer

A)  a holding company. 
B)  a parent corporation. 
C)  the appropriate state's secretary of state. 
D)  the U.S. Department of Commerce.

Question 11

Shareholders are not required to vote to approve a plan of merger.

Accepted Answer

A) True 
 B)False

Question 12

A merger between Beverage Corporation and Creamery Inc. can be expressed as Beverage + Creamery =

Accepted Answer

A)  Creamery. 
B)  Dairy Company. 
C)  Dairy Company + EZ Sip Inc. 
D)  EZ Sip Inc.

Exam 31: Combining and Dissolving a Corporation

Dissolution of a corporation can be initiated by

In a consolidation, the newly formed corporation acquires all of the assets and liabilities of both corporations that were consolidated.

All states have statutes authorizing consolidations of domestic corporations.

Appraisal rights do not normally apply to short-form mergers.

Burgers Inc. merges with Chicken Corporation with Burgers as the surviving corporation. After the merger, the shareholders of Chicken

Fact Pattern 31-2 Dynamo Corporation combines its assets and liabilities with those of Energy Company to form Fuel Inc. Dynamo and Energy cease to exist. Refer to Fact Pattern 31-2. The formation of Fuel Inc. is

One corporation that owns all of the shares of another corporation is a subsidiary corporation.

When dissolution takes place by voluntary action, the members of the board of directors act as trustees of the corporate assets.

Dissolution of a corporation can be brought about by the shareholders' majority vote to initiate dissolution proceedings.

Garden Company and Home Corporation make a plan to consolidate. Once approved, the plan likely will be filed with

Shareholders are not required to vote to approve a plan of merger.

A merger between Beverage Corporation and Creamery Inc. can be expressed as Beverage + Creamery =