Deck 8: Incorporations

Question 1

The corporation is domiciled in the state in which

A) it transacts the majority of its business.
B) it holds its meetings of the board of directors.
C) the corporation's articles of incorporation are filed.
D) the corporation's principal office is located.

Answer 1

C

Question 2

A stock subscription agreement does not usu- ally include the
D) rules and guidelines for the internal govern- ance of the corporation.

Answer 2

D

Question 3

Stock subscriptions may be used at any time during the life of a corporation to add new shareholders to the corporation.

Answer 3

True

Question 4

When the corporation's articles of incorporation authorize only one class of stock, that class is typically referred to as preferred stock.

Question 5

Information on incorporation procedures may usually be obtained from the office of the secre- tary of state or other appropriate state authority.

Question 6

In states that follow the Model Business Corpo- ration Act, incorporators

A) execute and file the articles of incorporation.
B) are also the first board of directors.
C) are elected by the board of directors.
D) sign the corporation's bylaws.

Question 7

The statutes of all states require the publication of a notice of incorporation in a legal newspa- per in the county where the registered office of the corporation is located.

Question 8

Upon incorporation, the corporation becomes liable for any preincorporation agreements en- tered into by its promoters.

Question 9

The set(s) forth the rules and guide- lines for the internal governance and control of a corporation.

A) articles of incorporation
B) bylaws
C) articles of corporate rules
D) organizational charter

Question 10

The bylaws of the corporation usually contain information concerning the number and terms of the members of the board of directors.

Question 11

The corporate existence typically begins when the articles of incorporation are signed.

Question 12

If the corporation's initial shareholders and board of directors are concerned about double taxation of the corporation, they may consider

A) forming a limited liability corporation.
B) filing a Subchapter S election.
C) eliminating double taxation in the corpora- tion's bylaws.
D) filing a tax-exempt status form with the Internal Revenue Service.

Question 13

A formal preincorporation agreement may be desirable when it is necessary to bind partici- pants to make future financial contributions that may be essential to the business venture.

Question 14

The promoter of a corporation is

A) the incorporator.
B) an individual or entity that actively assists in creating, projecting, and organizing a corporation.
C) an individual who invests in stock of the corporation prior to its formation.
D) the individual or entity that signs and files the articles of incorporation.

Question 15

The statutes of some states require the filing of a copy of the articles of incorporation with the county recorder or other county official of the state in which the registered office of the corpo- ration is located.

Question 16

The is an agreement entered into be- tween parties setting forth their intentions with regard to forming a corporation.

A) preincorporation agreement
B) corporate charter
C) articles of incorporation
D) shareholder agreement

Question 17

The name would probably not be an acceptable corporate name.

A) "ABC Furniture Rental"
B) "ABC Furniture Company"
C) "ABC Furniture, Inc."
D) "ABC Furniture, Incorporated"

Question 18

In states that follow the Model Business Corpo- ration Act, the need not be included in the articles of incorporation.

A) name of the corporation
B) names and addresses of the officers of the corporation
C) street address of the corporation's initial registered office address
D) number of shares the corporation is author- ized to issue

Question 19

The agenda for an organizational meeting would probably not include

A) ratification of the acts of the incorporators.
B) election of the first board of directors.
C) approval and signing of the preincorpora- tion agreement.
D) issuance of shares of stock.

Question 20

Most states require that the articles of incorpo- ration contain the names and addresses of the shareholders of the corporation.