Deck 32: Nature of a Corporation

Question 1

Which of the following does NOT determine the extent of one's rights and liabilities in a for-profit corporation?

A)Length of ownership of stock
B)Number of shares of stock owned
C)Corporation charter
D)Corporation by-laws

Answer 1

A

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

​ A(n)corporation is one that is formed to perform some nongovernmental function.

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

Question 5

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

Question 6

​ When does a corporation become a party to contracts made by the person forming a corporation?

A)When the corporation is incorporated.
B)When the 50% of the stock is sold.
C)When the corporation approves contracts made by the person forming the corporation.
D)When the other parties to the contracts approve the corporation's existence.

Question 7

A not-for-profit corporation usually issues stock.

Question 8

A subscription agreement is written agreement to buy stock.

Question 9

Which of the following is not true of a close corporation?

A)It has a large number of stockholders
B)Its stockholders are often actively involved in the managment
C)It has a small number of stockholders.
D)Its profits are taxed twice, unless it has elected S-Corp status

Question 10

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

Question 11

Statutes frequently require a corporation's name to end with "Corporation" or "incorporated" of an abbreviation thereof, or other indication of corporate status.

Question 12

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

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

Question 13

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

Question 14

​ 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 15

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 adopted by the shareholders.
C)They may contain any provision, even against public policy if agreed upon by all shareholders.
D)They are rules enacted by officers to govern their conduct.

Question 16

The articles of incorporation constitutes a contract between the corporation and the state.

Question 17

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

A)Power to do all acts reasonably necessary for carrying out its purpose
B)Power to indorse and accept negotiable instruments
C)Power to borrow money and contract debts
D)Power to have a continuous existence

Question 18

The powers of public corporations may be much greater than those of private corporations. ​

Question 19

In the state in which it received its initial charter a corporation is called a domestic corporation.

Question 20

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