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Exam 15: Corporations

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Question 21

True/False

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The Revised Model Business Corporation Act gives a close corporation less flexibility in determining its rules of operation.

A) True
B) False

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Question 22

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Like the bylaws of other corporations, the bylaws of Farmland Equipment, Inc.

A) establish the operating name of the corporation.
B) establish the value and classes of corporate stock.
C) were adopted at its first organizational meeting.
D) were submitted for approval to the public official in charge.

E) None of the above
F) A) and C)

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Question 23

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Directors are not obligated to refrain from self-dealing.

Before shareholders can bring a derivative suit, they must submit a written demand to the corporation, asking the board of directors to take action.

Frida and Gregor want to market a new line of fishing gear.To avoid income taxes at the corporate level, they should form

Sullivan and Taylor want to form a corporation to provide catering services.The first step in the incorporation procedure is to

Viola is a director of Water Pure Corporation.With respect to Water Pure, Viola's most important right is the right of

Boutique Corporation would like to change its corporate status to avoid income taxes at the corporate level.To qualify, the shareholders must not be

Lyla is a common shareholder in Norman's Nutty Nuts Corporation.As a common shareholder, Lyla is

To pierce the corporate veil means to ignore the corporate structure, exposing the shareholders to personal liability.

A new corporation's name can be deceptively similar to, but not the same, as the name of an existing corporation doing business within the state.

One of the key advantages of the corporate form is the unlimited liability of its owners.

Directors are entitled to use confidential corporate information for their personal advantage.

A director or officer is not liable to the corporation for a bad business decision.

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

Officers and employees of Apples Corporation and Oranges Corporation are convicted of conspiring to violate a federal law that is punishable by a term of imprisonment and a fine.Can Apples and Oranges be held liable for these crimes? If so, how can they be punished?

The board of directors normally can remove a corporate officer at any time with or without cause.

The primary document needed to incorporate a business is the articles of incorporation.

Starr Cardio, Inc., is a small business.Ted, Uma, and eleven other members of the Starr family own all of its stock.Currently, Starr's income is taxed at the corporate level and, after being distributed to the family members, at the shareholder level.Can Starr retain its corporate status but otherwise avoid this double taxation? If so, how?

The first step in the incorporation process is to select a state in which to operate.