Deck 29: Corporate Expansion, State and Federal Regulation of Foreign Corporations, and Corporate Dissolution

Question 1

Liquidation is the same as involuntary dissolution.

Answer 1

False

Question 2

The major constitutional limitation on long-arm statutes is the Due Process Clause.

Answer 2

True

Question 3

A company incorporated outside the state in which it is doing business is known as a foreign incorporation.

Answer 3

True

Question 4

The tender offer is an invitation to shareholders to sell their shares at a stipulated price.

Question 5

In an) _____ , the acquired company goes out of existence by being absorbed into the acquiring company.

A) merger
B) takeover
C) divestiture
D) consolidation
E) codicil

Question 6

It is necessary for a foreign corporation to maintain a registered office with a registered agent who works in state where the corporation is doing business.

Question 7

Dissolution of a corporation is the same as corporate death.

Question 8

Successor's liability has the least adverse effect on an) ____.

A) cash merger
B) takeover
C) consolidation
D) asset purchase
E) noncash merger

Question 9

An asset purchase is a type of corporate expansion strategies.

Question 10

In a merger, the acquired company goes out of existence by being absorbed into the acquiring company.

Question 11

Even when a tender offer has not been made, the Williams Act requires any person who acquires more than 5 percent ownership of a corporation to file a statement with the Securities and Exchange Commission SEC) within ten days.

Question 12

As an alternative to dissolution, a corporation in financial trouble looks to the blue sky law for relief.

Question 13

Sequestration of a corporation's assets at the hands of a receiver will terminate the corporation's being.

Question 14

The process of winding up is known as amalgamation.

Question 15

In order to completely acquire Write Well Inc., Delta Inc. paid the shareholders of Write Well Inc. money in exchange for their shares. This is an example of a _____.

A) freeze-out merger
B) non cash merger
C) horizontal divestiture
D) leveraged buyout
E) vertical divestiture

Question 16

Which of the following expansion strategies results in the formation of an entity that is an entirely new corporation?

A) A cash merger
B) A takeover
C) A consolidation
D) An asset purchase
E) A noncash merger

Question 17

A noncash merger is also known as a freeze-out merger.

Question 18

Soliciting orders through agents do not fall within the definition of transacting business.

Question 19

A takeover requires an affirmative vote by the target company's board of directors.

Question 20

A consolidation between two firms differs from a merger between two firms in that the consolidation between two firms:

A) is a backward vertical expansion strategy.
B) is a forward vertical expansion strategy.
C) leads to the formation of a new corporation.
D) leads to an entity free from successor's liability.
E) is a horizontal integration strategy.

Question 21

Dissolution differs from liquidation in that dissolution is:

A) the end of the legal existence of a corporation.
B) the end of the physical existence of a corporation.
C) the distribution of a corporation's assets.
D) the distribution of a corporation's liabilities.
E) a process independent from the judicial system.

Question 22

Under Sections 14.06 and 14.07 of the Revised Model Business Corporation Act, a dissolved corporation:

A) endures despite the vicissitudes of the economy or the corporation's internal affairs.
B) is a company incorporated outside the state in which it is doing business.
C) purchases an asset in the form of a leveraged buyout.
D) must provide written notice of the dissolution to its creditors.
E) it can merge with the target company the so-called short-form merger.

Question 23

A state action to dissolve a corporation is known as _____

A) voluntary dissolution
B) involuntary dissolution
C) forward vertical integration
D) backward vertical integration
E) amalgamation

Question 24

Ending the legal existence of a corporation by unanimous written consent of its shareholders is known as _____.

A) voluntary dissolution
B) involuntary dissolution
C) forward vertical integration
D) backward vertical integration
E) amalgamation

Question 25

_____ is the end of the legal existence of a corporation.

A) Dissolution
B) Liquidation
C) Integration
D) Arson effect
E) Allongement

Question 26

Give examples of a few activities that do not fall within the definition of transacting business and may be carried on even if the foreign corporation has not obtained a certificate of authority.

Question 27

Foreign corporations are required to obtain from the secretary of the state an) _____ to conduct business.

A) memorandum of association
B) certificate of authority
C) article of incorporation
D) no-objection certificate
E) notice of existence

Question 28

_____ is the process of paying the creditors and distributing the assets of a corporation.

A) Dissolution
B) Vertical integration
C) Amalgamation
D) Liquidation
E) Horizontal integration

Question 29

Differentiate between a merger and a takeover.

Question 30

A foreign corporation may not sue in the state courts to enforce its rights until it obtains an) _____.

A) no-objection certificate
B) stay order
C) certificate of authority
D) promissory note
E) letter of credit

Question 31

In an)_____, the acquiring company appeals directly to the target's shareholders, offering either money or other securities, often at a premium over market value, in exchange for their shares.

A) merger
B) takeover
C) consolidation
D) asset purchase
E) codicil

Question 32

If one company acquires 90 percent or more of the stock of another company, it can merge with the target company without the consent of the target company's shareholders. The resultant merger is known as the _____ merger

A) ademption
B) runaway shop
C) codicil
D) short-form
E) closed shop