Deck 34: Nature of a Corporation

Question 1

A written agreement to buy a corporation's stock made in advance of the actual incorporation is known as a subscription agreement.

Answer 1

True

Question 2

A corporation can be organized in any state the promoter chooses.

Answer 2

True

Question 3

Which of the following is an incidental power of a corporation?

A) Power to acquire and convey property
B) Power to indorse and accept negotiable instruments
C) Power to perform all acts necessary for carrying out its purpose
D) Power to have a continuous existence

Answer 3

D

Question 4

What are the three types of powers every corporation has? Explain

Question 5

A private corporation is one formed to carry out some governmental function.

Question 6

Certificates called shares of stock represent ownership in a stock corporation.

Question 7

A person who takes the initial steps to form a corporation is known as a(n) _____.

A) subscriber
B) developer
C) initiator
D) promoter

Question 8

A corporation does not have the right to hold property under its own name.

Question 9

Any contract entered into by a corporation that goes beyond its powers is called an ultra vires contract.

Question 10

Of the following people, who would be considered a subscriber?

A) A person who buys assets from a corporation
B) A person who buys stock in a proposed corporation
C) A person who initiates steps to form a corporation
D) A person who buys journals and publications from a corporation

Question 11

The power to make bylaws and regulations is an incidental power that a corporation possesses.

Question 12

A stock corporation is an example of a _____ corporation.

A) public-benefit
B) shell
C) for-profit
D) public

Question 13

The people who form a corporation are known as subscribers.

Question 14

If incorporated in another country, a corporation may be referred to as a foreign corporation.

Question 15

Which of the following is true of a close corporation?

A) Its profits cannot be reported by stock holders as income in their personal income tax returns.
B) It is also known as a closely held corporation.
C) It enables a large number of people to own stock.
D) Its profits are usually taxed twice.

Question 16

A(n) _____ corporation is one that is formed to carry out some governmental function.

A) quasi
B) public
C) private
D) intermediary

Question 17

After it is incorporated, a corporation cannot disapprove of the contracts made by the promoter.

Question 18

A corporation that is incorporated in another country is known as a(n) _____.

A) close corporation
B) alien corporation
C) domestic corporation
D) public corporation

Question 19

Which of the following best describes bylaws?

A) They are rules enacted by directors to govern a corporation's conduct.
B) They are rules of conduct given to the board of directors during incorporation.
C) They are rules and regulations for individual stockholders.
D) They are rules relating to international expansion and entry.

Question 20

A not-for-profit corporation is one formed by private individuals for some charitable purpose.