Question 1

A postincorporation subscription is:
A) like a preincorporation subscription in that the subscriber may withdraw the offer to enter into the subscription any time before the corporation accepts it.
B) treated as a contract between the subscriber and the corporation.
C) not recognized under the RMBCA.
D) defined under the RMBCA as a contract between all subscribers.

Accepted Answer

A postincorporation subscription is a contract between the subscriber and the corporation, and is treated as such. Preincorporation subscriptions are made before the corporation comes into existence, while postincorporation subscriptions are made after the corporation has already been created. The RMBCA recognizes postincorporation subscriptions as valid contracts between the subscriber and the corporation. Therefore, the correct option is B.

Question 2

Name the classifications of corporations.

Accepted Answer

The answer of Name the classifications of corporations....

Question 3

Define "promoter" in reference to a corporation.

Accepted Answer

The answer of Define "promoter" in reference to a corporation....

Question 4

Which of the following is untrue regarding closely held corporations?
A) Most corporations in the U.S. are closely held.
B) In most states, closely held corporations are subject to the general incorporation statute governing all corporations.
C) Shareholders usually have little voice in the management and control of the business.
D) Some states have enacted special legislation to accommodate the needs of closely held corporations.

Accepted Answer

Shareholders in closely held corporations usually have a significant voice in the management and control of the business compared to shareholders in publicly traded corporations.

Question 5

What is the definition of a Subchapter S Corporation?

Accepted Answer

The answer of What is the definition of a Subchapter...

Question 6

Which of the following is untrue regarding professional corporations?
A) State statutes permitting professional corporations all apply only to specified professions.
B) All states have statutes which permit the practice of professions by duly licensed individuals in the corporate form.
C) There is a supplement to the MBCA which deals with professional corporations.
D) Professionals may avoid personal liability for corporate debts by incorporating.

Accepted Answer

The answer of Which of the following is untrue regarding...

Question 7

Matt and Ron would like to form a corporation. Discuss what is required in most states to form a corporation.

Accepted Answer

The answer of Matt and Ron would like to form...

Question 8

Mark complied with all formation requirements for incorporating his taxicab business. He is the sole shareholder in the corporation. The corporation owns two automobiles that Mark frequently uses for his own personal use. In addition, he sometimes deposits the money he takes in during the day into his personal checking account. One day, an employee of the company, while driving one of the company vehicles, accidentally hits Peter, a pedestrian, in a crosswalk. Peter sues both Mark and the Taxi Company for $100,000. The corporate assets are only $32,000.
a. Is the corporation liable for the acts of its employee? Explain.
b. Will Mark be personally liable under the facts? Why? Explain.

Accepted Answer

The answer of Mark complied with all formation requirements for...

Question 9

What are the principal attributes of a corporation?

Accepted Answer

The answer of What are the principal attributes of a...

Question 10

The president of Hi-Glow Cosmetics sends his top chemist to Hi-Glow's competitor's labs to steal its formula for shiny lipstick. The chemist gets caught and is sent to jail. Can Hi-Glow be found to be criminally liable?
A) Yes, under the theory of ultra vires
B) Yes, since the president authorized the crime
C) No, because a corporation acts through the board of directors
D) No, because a corporation can't go to jail

Accepted Answer

The president authorized the chemist to engage in criminal activity, making Hi-Glow criminally liable for the actions of its agent.

Question 11

Answer the following:
a. What powers does a corporation normally possess?
b. What is the doctrine of ultra vires? What is the effect of an ultra vires contract?
A corporation possesses only the powers that the state confers on it. Typical general powers granted by incorporation statutes include the following: (1) perpetual succession; (2) to sue and be sued in its corporate name; (3) to have a corporate seal; (4) to make and amend bylaws; (5) to acquire and dispose of property; (6) to own, vote, and dispose of shares in other entities; (7) to make

Accepted Answer

The answer of Answer the following:
a. What powers does a...

Question 12

Identify each of the following corporations by type.
a.Dr. Smith and Dr. Jones are medical doctors who practice together. They incorporate their medical practice so that they can offer themselves and their employees better employment benefits.

b. A group of concerned citizens obtains a corporate charter from the state to form a local Water Planning and Management Corporation that is authorized to do water planning on a local level, to grant permits for such purposes as the installation of ditches, and to encourage good water usage practices in their jurisdictional area.
Agatha and Betty, who are sisters, form a corporation in which they are the sole shareholders. 
c.They plan to operate a large retail store that sells collectibles. Agatha is the president and Betty
is the chairperson of the board of directors.
d. Shelby and Trent form a corporation to prevent spouse and child abuse. The corporation operates a shelter for battered women and homeless children.
e. Zebron Corporation is incorporated in the State of West Virginia. It decides to expand its business to Kentucky. What type of corporation is it in West Virginia? What type of corporation is it in Kentucky?

Accepted Answer

The answer of Identify each of the following corporations by...

Question 13

Discuss the corporate form of business organization with respect to how it is created, the liability of persons having an ownership interest, how management is conducted, and duration of existence.

Accepted Answer

The answer of Discuss the corporate form of business organization...

Question 14

Explain each of the following specialized types of corporations: a. Professional b. Public _c_._Nonprofit

Accepted Answer

The answer of Explain each of the following specialized types...

Question 15

Which of the following run the day-to-day operations of a corporation?
A) Shareholders
B) Board of directors
C) Officers
D) Subscribers

Accepted Answer

While shareholders own a portion of the company and the board of directors sets policies and makes major decisions, it is the officers (such as the CEO, CFO, COO) who are responsible for the day-to-day operations of the corporation. Subscribers are individuals who sign up for a service, usually related to media or publications.

Quiz 33: Nature, Formation, and Powers

A postincorporation subscription is:

Name the classifications of corporations.

Define "promoter" in reference to a corporation.

Which of the following is untrue regarding closely held corporations?

What is the definition of a Subchapter S Corporation?

Which of the following is untrue regarding professional corporations?

Matt and Ron would like to form a corporation. Discuss what is required in most states to form a corporation.

What are the principal attributes of a corporation?

The president of Hi-Glow Cosmetics sends his top chemist to Hi-Glow's competitor's labs to steal its formula for shiny lipstick. The chemist gets caught and is sent to jail. Can Hi-Glow be found to be criminally liable?

Discuss the corporate form of business organization with respect to how it is created, the liability of persons having an ownership interest, how management is conducted, and duration of existence.

Explain each of the following specialized types of corporations: a. Professional b. Public c. Nonprofit

Which of the following run the day-to-day operations of a corporation?

Explain each of the following specialized types of corporations: a. Professional b. Public _c_._Nonprofit