Question 1

The articles of incorporation serve as a primary source of authority for a corporation's business operations.

Accepted Answer

A) True 
 B)False

Question 2

Flo and Glen form Health Food Inc. to coordinate the purchase, sale, and delivery of food products from organic farms to hospitals and other institutions. The stated purpose is to make a profit and to have a material positive impact on society and the environment. Health Food is

Accepted Answer

A)   ​a nonprofit corporation.
B)   ​not a corporation.
C)   ​a benefit corporation.
D)   ​a private corporation.E) B) and C)
F) B) and D)

Question 3

Hollywood Lights, Inc. substantially complies with all conditions precedent to incorporation. Hollywood is most likely

Accepted Answer

A)   ​a corporation by estoppel.
B)   ​a de facto corporation.
C)   ​a de jure corporation.
D)   ​a benefit corporation.E) A) and B)
F) None of the above

Question 4

To pierce the corporate veil means to reveal the identity of its true owner.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)   ​a bonus to Rob for financial maneuvers.
B)   ​a discharge for Solar in bankruptcy.
C)   ​a pierce of the corporate veil.
D)   ​a review of Thermal's articles of incorporation.E) B) and C)
F) B) and D)

Question 6

Dollars & Sense, Inc., is incorporated in the state of New Jersey and is doing business in the state of New York. In New York, Dollars & Sense is properly referred to as

Accepted Answer

A)   ​a domestic corporation.
B)   ​a foreign corporation.
C)   ​an alien corporation.
D)   ​a public corporation.E) All of the above
F) A) and D)

Question 7

Boutique Bodega Corporation would like to change its corporate status to that of an S corporation. To qualify, the shareholders must not be

Accepted Answer

A)   ​corporations.
B)   ​estates.
C)   ​individuals.
D)   ​partnerships.E) A) and B)
F) A) and C)

Question 8

A de jure corporation is one that is formed for a single purpose.

Accepted Answer

A) True 
 B)False

Question 9

The state can dissolve a corporation for failing to pay taxes.

Accepted Answer

A) True 
 B)False

Question 10

Bylaws are the internal rules of management for a corporation.

Accepted Answer

A) True 
 B)False

Question 11

Ida and Jay are the shareholders and the directors of Keystone Property Management Inc. Lily and Mike are Keystone officers. The responsibility for the overall management of this firm rests with

Accepted Answer

A)   ​Ida and Jay, as the directors.
B)   ​Lily and Mike, as the officers.
C)   ​Ida and Jay, as the shareholders.
D)   ​all of the parties.E) A) and B)
F) B) and C)

Question 12

The date when the principal of a bond is returned to the investor is the maturity date.

Accepted Answer

A) True 
 B)False

Question 13

A foreign corporation normally does not need a certificate of authority to sell goods or services via the Internet.

Accepted Answer

A) True 
 B)False

Question 14

A corporation possesses the same right of access to the courts as a citizen.

Accepted Answer

A) True 
 B)False

Question 15

Allen wants Wilderness Outfitters to join with him to form and do business as Canyon River Rafting Corporation. A corporation can be owned by

Accepted Answer

A)   ​natural persons only.
B)   ​other businesses only.
C)   ​other businesses or natural persons.
D)   ​none of the choices.E) None of the above
F) B) and C)

Question 16

Sean is the incorporator of Twisty's Pretzels Corporation. Ross is a shareholder, Phyllis is a director, and Velma is an officer. The day-to-day operations of Twisty's are overseen by

Accepted Answer

A)   ​Velma.
B)   ​Ross.
C)   ​Sean.
D)   ​Phyllis.E) A) and B)
F) B) and C)

Question 17

Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, Wings2Go is most likely

Accepted Answer

A)   ​a corporation by estoppel.
B)   ​a de facto corporation.
C)   ​a de jure corporation.
D)   ​ultra vires.E) B) and C)
F) A) and D)

Question 18

A corporate director "owns" the corporation.

Accepted Answer

A) True 
 B)False

Question 19

A business that holds itself out as being a corporation may not be able to deny corporate status, even if it makes no attempt to incorporate.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)   ​none of the choices.
B)   ​depart significantly from traditional corporate formalities.
C)   ​bind the corporation to an action that will greatly affect its purpose.
D)   ​borrow funds and lend funds.E) None of the above
F) All of the above

Exam 5: Corporate Formation and Financing

Sean is the incorporator of Twisty's Pretzels Corporation. Ross is a shareholder, Phyllis is a director, and Velma is an officer. The day-to-day operations of Twisty's are overseen by

Correct AnswerverifiedShow Answer

The state can dissolve a corporation for failing to pay taxes.

Correct AnswerverifiedShow Answer

The date when the principal of a bond is returned to the investor is the maturity date.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Flo and Glen form Health Food Inc. to coordinate the purchase, sale, and delivery of food products from organic farms to hospitals and other institutions. The stated purpose is to make a profit and to have a material positive impact on society and the environment. Health Food is

Correct AnswerverifiedShow Answer

Dollars & Sense, Inc., is incorporated in the state of New Jersey and is doing business in the state of New York. In New York, Dollars & Sense is properly referred to as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A business that holds itself out as being a corporation may not be able to deny corporate status, even if it makes no attempt to incorporate.

Correct AnswerverifiedShow Answer

A foreign corporation normally does not need a certificate of authority to sell goods or services via the Internet.

Correct AnswerverifiedShow Answer

Allen wants Wilderness Outfitters to join with him to form and do business as Canyon River Rafting Corporation. A corporation can be owned by

Correct AnswerverifiedShow Answer

A de jure corporation is one that is formed for a single purpose.

Correct AnswerverifiedShow Answer

To pierce the corporate veil means to reveal the identity of its true owner.

Correct AnswerverifiedShow Answer

A corporation possesses the same right of access to the courts as a citizen.

Correct AnswerverifiedShow Answer

A corporate director "owns" the corporation.

Correct AnswerverifiedShow Answer

The articles of incorporation serve as a primary source of authority for a corporation's business operations.

Correct AnswerverifiedShow Answer

Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, Wings2Go is most likely

Correct AnswerverifiedShow Answer

Ida and Jay are the shareholders and the directors of Keystone Property Management Inc. Lily and Mike are Keystone officers. The responsibility for the overall management of this firm rests with

Correct AnswerverifiedShow Answer

Bylaws are the internal rules of management for a corporation.

Correct AnswerverifiedShow Answer

Boutique Bodega Corporation would like to change its corporate status to that of an S corporation. To qualify, the shareholders must not be

Correct AnswerverifiedShow Answer

Hollywood Lights, Inc. substantially complies with all conditions precedent to incorporation. Hollywood is most likely

Correct AnswerverifiedShow Answer

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