Question 1

Corporations have implied powers.

Accepted Answer

A) True 
 B)False

Question 2

[Nail Salon] Thea and her friends Josef and Danny, all U.S. citizens, want to open a nail salon. They would all like to avoid personal liability for debts of the business and/or wrongful acts of each other. They would also like to minimize taxation. Thea is in favor of a corporation and asks if there is any problem with that form of business. Josef and Danny say that they are concerned about double taxation with a corporation and that they are in favor of a partnership, even if personal liability is a concern. Thea said that she was concerned about the deductibility of losses if the corporate form was chosen. She did some research and suggested an S corporation to Josef and Danny which she claimed would avoid the problem of double taxation.
-Is there an impediment to the business qualifying as an S Corporation, based on the information available?

Accepted Answer

A)   Yes, because there must be at least 100 shareholders involved.
B)   Yes, because a business must operate as a partnership for at least two years before converting to an S corporation.
C)   Yes, because a business must operate as a general corporation for at least two years before converting to an S corporation.
D)   Yes, because at least one-third of the shareholders in an S corporation must be corporations.
E)   No.F) B) and C)
G) A) and B)

Question 3

Convertible bonds allow shareholders to exchange their bonds for shares of company stock.

Accepted Answer

A) True 
 B)False

Question 4

A corporation is a domestic corporation in the particular state in which it is ________.

Accepted Answer

A)   does business
B)   has a bank account
C)   recognized by federal law
D)   incorporated
E)   has its principal place of businessF) A) and B)
G) C) and D)

Question 5

Which of the following was the result on appeal in Protect My Check, Inc. v Dilger and Steffan the case determining whether the ban on direct corporate contributions violated PMC's free speech rights?

Accepted Answer

A)   The court held that the regulations complained of impermissibly regulated speech because nonprofit corporations were treated differently than corporations operated on a for profit basis and this made the law unconstitutional.
B)   The court that as long as the Kentucky laws at issue allow corporations to administer a state PAC and contribute to state candidates through that PAC, and as long as the ban on direct contributions applies equally to corporations, LLCs, and other similarly situated groups, such laws are closely drawn to combat the legitimate interest of preventing the reality or appearance of quid pro quo corruption and are therefore constitutional
C)   The court held that corporations could be treated differently than LLCs and unions because of their corporate structure.
D)   The court ruled that the regulations complained of permissibly regulated speech because nonprofit corporations, unlike corporations operated on a for profit basis, lack constitutional protections in free speech cases.
E)   The court ruled that free speech rights were for natural citizens only and therefore not an action that the courts or regulations protected for corporations.F) A) and E)
G) B) and E)

Question 6

A U.S. corporation doing business in Mexico is considered what type of corporation in Mexico?

Accepted Answer

A)   Visiting
B)   Foreign
C)   Interstate
D)   Alien
E)   ApprovedF) B) and C)
G) C) and D)

Question 7

The most common type of corporation is ________.

Accepted Answer

A)   non-profit
B)   de jure
C)   for profit
D)   family owned
E)   government ownedF) All of the above
G) A) and B)

Question 8

Which of the following is false regarding requirements needed for a business to qualify as an S corporation?

Accepted Answer

A)   It must have no more than 100 shareholders.
B)   Individuals, trusts, partnerships, and in some circumstances corporations can be shareholders.
C)   All S corporations must be domestic corporations.
D)   No shareholder can be a nonresident alien.
E)   S corporations can issue only one class of shares, although they need not have identical voting rights.F) C) and E)
G) B) and E)

Question 9

Which of the following powers of state incorporation statutes are typically granted to corporations?

Accepted Answer

A)   State incorporation statutes give corporations the power to make charitable contributions.
B)   State incorporation statutes prohibit corporations from loaning money because that is within the realm of state banks recognized by the state banking regulatory authority.
C)   State incorporation statutes give corporations existence for up to 100 years.
D)   State incorporation statutes expressly state the powers granted to corporations thereby negating the existence of implied powers.
E)   State incorporation statutes generally expressly give corporations only the broad authority to operate within the law to the benefit of stockholders resulting in most actions of corporations arising from implied powers.F) All of the above
G) A) and B)

Question 10

What do nonprofit corporations do with profits?

Accepted Answer

A)   Distribute them to shareholders.
B)   Distribute them to stockholders.
C)   Provide services to members and reinvest in the business.
D)   Sell them to stockholders.
E)   Nonprofit corporations are not allowed to earn profits.F) D) and E)
G) B) and E)

Question 11

A bond which allows shareholders to exchange the bond for shares of company stock is a(n)  ________ bond?

Accepted Answer

A)   Unsecured
B)   Secured
C)   Equity
D)   Convertible
E)   IncomeF) All of the above
G) B) and D)

Question 12

In states in which it conducts business but is not incorporated, a corporation is a[n] ________ corporation.

Accepted Answer

A)   Visiting
B)   Foreign
C)   Interstate
D)   Intrastate
E)   ApprovedF) A) and B)
G) A) and C)

Question 13

Corporations are not required to indicate in the name of the corporation that the business is incorporated.

Accepted Answer

A) True 
 B)False

Question 14

Gladstonian Corporation has not been following the statutory mandates regarding corporate business in the state they are incorporated. If Gladstonian is sued, a court could ________ to determine liability.

Accepted Answer

A)   break the glass ceiling
B)   pierce the corporate veil
C)   temporarily force the shutdown of the business
D)   subpoena executives, board of directors and shareholders
E)   takeover the corporationF) A) and D)
G) A) and E)

Question 15

________ is the document filed with the state that explains a corporations organization.

Accepted Answer

A)   Incorporation document
B)   Articles of incorporation
C)   Corporate charter
D)   Corporate establishment document
E)   Domestic corporation documentsF) A) and E)
G) B) and C)

Question 16

Louisa runs a corporation which sells bracelets to generate money to run a soup kitchen that feeds the needy. The corporation earns profits, but has no shareholders. Instead, all profits are used to provide food for the needy. The corporation is most likely a ________ ?

Accepted Answer

A)   Public corporation.
B)   S corporation.
C)   A corporation.
D)   Private corporation.
E)   Nonprofit corporation.F) A) and E)
G) B) and D)

Question 17

________ are bonds that corporations may call in and repay at specific times.

Accepted Answer

A)   Secured transactions
B)   Credit notes
C)   Callable bonds
D)   Savings bonds
E)   Income commitmentsF) A) and E)
G) A) and B)

Question 18

Which of the following generally does not offer stock to the public?

Accepted Answer

A)   Alien corporations
B)   Foreign corporations
C)   Closely held corporations
D)   Carefully held corporations
E)   Minority shareholder controlled corporationsF) A) and C)
G) D) and E)

Question 19

________ are what corporations declare in order to distribute their income to shareholders.

Accepted Answer

A)   Profit statements
B)   Dividends
C)   Statements of cash flow
D)   Income and Loss sheets
E)   Net-flow statementsF) B) and D)
G) A) and C)

Question 20

What are the six express corporate powers, as set forth in the text?

Accepted Answer

Following are express powers of a corpor...

Exam 38: Corporations: Formation and Financing

Which of the following powers of state incorporation statutes are typically granted to corporations?

Correct Answer
verified

________ are bonds that corporations may call in and repay at specific times.

Correct Answer
verified

Corporations have implied powers.

Correct Answer
verified

A corporation is a domestic corporation in the particular state in which it is ________.

Correct Answer
verified

Which of the following was the result on appeal in Protect My Check, Inc. v Dilger and Steffan the case determining whether the ban on direct corporate contributions violated PMC's free speech rights?

Correct Answer
verified

What do nonprofit corporations do with profits?

Correct Answer
verified

Louisa runs a corporation which sells bracelets to generate money to run a soup kitchen that feeds the needy. The corporation earns profits, but has no shareholders. Instead, all profits are used to provide food for the needy. The corporation is most likely a ________ ?

Correct Answer
verified

In states in which it conducts business but is not incorporated, a corporation is a[n] ________ corporation.

Correct Answer
verified

Convertible bonds allow shareholders to exchange their bonds for shares of company stock.

Correct Answer
verified

What are the six express corporate powers, as set forth in the text?

Correct Answer
verified
Following are express powers of a corpor...
View Answer

Which of the following generally does not offer stock to the public?

Correct Answer
verified

Corporations are not required to indicate in the name of the corporation that the business is incorporated.

Correct Answer
verified

________ is the document filed with the state that explains a corporations organization.

Correct Answer
verified

Gladstonian Corporation has not been following the statutory mandates regarding corporate business in the state they are incorporated. If Gladstonian is sued, a court could ________ to determine liability.

Correct Answer
verified

________ are what corporations declare in order to distribute their income to shareholders.

Correct Answer
verified

Which of the following is false regarding requirements needed for a business to qualify as an S corporation?

Correct Answer
verified

Correct Answer
verified

A bond which allows shareholders to exchange the bond for shares of company stock is a(n) ________ bond?

Correct Answer
verified

The most common type of corporation is ________.

Correct Answer
verified

A U.S. corporation doing business in Mexico is considered what type of corporation in Mexico?

Correct Answer
verified

Exam 38: Corporations: Formation and Financing

Which of the following powers of state incorporation statutes are typically granted to corporations?

Correct AnswerverifiedShow Answer

________ are bonds that corporations may call in and repay at specific times.

Correct AnswerverifiedShow Answer

Corporations have implied powers.

Correct AnswerverifiedShow Answer

A corporation is a domestic corporation in the particular state in which it is ________.

Correct AnswerverifiedShow Answer

Which of the following was the result on appeal in Protect My Check, Inc. v Dilger and Steffan the case determining whether the ban on direct corporate contributions violated PMC's free speech rights?

Correct AnswerverifiedShow Answer

What do nonprofit corporations do with profits?

Correct AnswerverifiedShow Answer

Louisa runs a corporation which sells bracelets to generate money to run a soup kitchen that feeds the needy. The corporation earns profits, but has no shareholders. Instead, all profits are used to provide food for the needy. The corporation is most likely a ________ ?

Correct AnswerverifiedShow Answer

In states in which it conducts business but is not incorporated, a corporation is a[n] ________ corporation.

Correct AnswerverifiedShow Answer

Convertible bonds allow shareholders to exchange their bonds for shares of company stock.

Correct AnswerverifiedShow Answer

What are the six express corporate powers, as set forth in the text?

Correct AnswerverifiedFollowing are express powers of a corpor...View AnswerShow Answer

Which of the following generally does not offer stock to the public?

Correct AnswerverifiedShow Answer

Corporations are not required to indicate in the name of the corporation that the business is incorporated.

Correct AnswerverifiedShow Answer

________ is the document filed with the state that explains a corporations organization.

Correct AnswerverifiedShow Answer

Gladstonian Corporation has not been following the statutory mandates regarding corporate business in the state they are incorporated. If Gladstonian is sued, a court could ________ to determine liability.

Correct AnswerverifiedShow Answer

________ are what corporations declare in order to distribute their income to shareholders.

Correct AnswerverifiedShow Answer

Which of the following is false regarding requirements needed for a business to qualify as an S corporation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A bond which allows shareholders to exchange the bond for shares of company stock is a(n) ________ bond?

Correct AnswerverifiedShow Answer

The most common type of corporation is ________.

Correct AnswerverifiedShow Answer

A U.S. corporation doing business in Mexico is considered what type of corporation in Mexico?

Correct AnswerverifiedShow Answer

Correct Answer
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verified
Following are express powers of a corpor...
View Answer

Correct Answer
verified

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