Question 1

Hailey and Ike hold the first organizational meeting of Java Kiosk Corporation.Probably the most important function of this meeting is

Accepted Answer

The answer of Hailey and Ike hold the first organizational...

Question 2

Jim and Kiley are architects and members of J&K,P.C. ,a profes?sional corporation.Jim supervises Luc,an employee of the firm.As a member,Jim

Accepted Answer

As a supervisor of Luc, Jim may be held personally liable for any malpractice committed by Luc. However, Jim's liability would be limited to his own actions and any actions he directly supervised or had control over. Jim would not be personally liable for any torts committed by Kiley, as the professional corporation provides limited liability for its members.

Question 3

Sullivan and Taylor want to form a corporation to provide catering services.The first step in the incorporation procedure is to

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The answer of Sullivan and Taylor want to form a...

Question 4

Wild & Scenic River Tours,Inc. ,is a corporation.Wild & Scenic has the implied power to

Accepted Answer

Implied powers are those that are not expressly stated in the corporation's articles of incorporation or bylaws but are necessary to carry out the corporation's purposes. Option D is the best choice as it accurately describes the scope of implied powers. Options A, B, and C are examples of express powers that may be granted to a corporation in its articles of incorporation or bylaws.

Question 5

Mari buys 500 shares of common stock in National Livestock Traders,Inc.As a shareholder of record,Mari owns a proportionate interest in terms of

Accepted Answer

As a shareholder of record, Mari owns a proportionate interest in the control, earnings and net assets of National Livestock Traders, Inc. This means that Mari has the right to vote in important decisions affecting the company, receive a portion of the profits as dividends, and also receive a proportionate share of the company's assets in the event of liquidation.

Question 6

Ivy and Justin want to form and do business as Kayak Adventures Corporation.A corporation can be owned by

Accepted Answer

A corporation can be owned by both artificial and natural persons. Artificial persons, such as other corporations, can own stock in a corporation, along with natural persons who can buy and own shares in the corporation.

Question 7

Start-Up Corporation substantially complies with all conditions prece?dent to incorpo?ration.Start-Up has

Accepted Answer

Start-Up Corporation has de jure existence because it has substantially complied with all conditions precedent to incorporation, which means it is a legally recognized corporation with all the rights and privileges that come with incorporation. It is not a corporation by estoppel (A) as there is no evidence that a third party relied on the corporation's representations to their detriment. It is not a de facto corporation (B) because it has met all the legal requirements for incorporation. It is not an ultra vires corporation (D) because it has not engaged in activities beyond its legal authority.

Question 8

Eager Beaver Corporation fails to hold a meeting to adopt bylaws.Under this circumstance,Eager Beaver will still be treated as a legal corporation in those states that recognize the common law doctrine of

Accepted Answer

The common law doctrine of de facto corporation recognizes corporations that have not complied with all the legal formalities, including the failure to hold a meeting to adopt bylaws. Therefore, Eager Beaver Corporation will still be treated as a legal corporation under this doctrine in those states that recognize it.

Question 9

Suki is a registered agent for Trans-state Trucking,Inc.(TTI),which incorporated in Utah.As a registered agent,Suki

Accepted Answer

As a registered agent, Suki is designated to receive legal documents on behalf of TTI, meaning she is responsible for receiving any legal notices or paperwork served to the company.

Question 10

Fact Pattern 39-1A 
Mountaintop Clearview Corporation authorizes Niles,its employee,to oversee its timber operation.In the course of his employment,Niles disposes of the operation's waste illegally.Orson is a Mountaintop shareholder.
-Refer to Fact Pattern 39-1A.Liability for Niles's act most likely rests with Orson to

Accepted Answer

The answer of Fact Pattern 39-1A 
Mountaintop Clearview Corporation authorizes...

Question 11

Omega Corporation makes and markets digital timers,clocks,and related products.Like other business corpo?rations,Omega issues securities to

Accepted Answer

Omega Corporation issues securities to obtain financing, such as through issuing stocks or bonds, which can help the company raise capital to fund its operations and growth initiatives. Securities issuance is a common way for businesses to raise funds from investors.

Question 12

Quixotic Company claims to be a corporation but it is not.Rachel signs a con?tract with Quixotic that is not performed.In Rachel's suit against Quixotic,a court will likely recognize the firm as

Accepted Answer

Quixotic Company may be recognized by the court as a corporation by estoppel, which means that even though it is not actually a corporation, it acted in a way that led Rachel to believe it was, and thus should be held liable as one.

Question 13

Boutique Corporation would like to change its corporate status to avoid in?come taxes at the corporate level.To qualify,the shareholders must not be

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The answer of Boutique Corporation would like to change its...

Question 14

Stan incorporates his scientific products business as Tech Precision Supply,Inc.This firm could have perpetual existence in

Accepted Answer

The answer of Stan incorporates his scientific products business as...

Question 15

Discount Factory Outlets,Inc. ,issues bonds.Bonds

Accepted Answer

The answer of Discount Factory Outlets,Inc. ,issues bonds.Bonds
...

Question 16

To qualify as a professional corporation,Medical Clinic,P.C. ,

Accepted Answer

To qualify as a professional corporation, the corporation must be formed by professionals who are licensed to provide a specific type of service. All shareholders do not necessarily have to have voting rights, nor is there a requirement for a certain number of shareholders.

Question 17

Convenience Mart,Inc. ,is a closely held corporation.Convenience Mart is

Accepted Answer

Closely held corporations are generally allowed to restrict the transfer of their stock, meaning that the shareholders cannot sell or transfer their shares without the permission of the other shareholders or the corporation itself. This is different from publicly traded corporations, which allow for the free trading of stock on stock exchanges. Options A, B, and D are incorrect because closely held corporations are not eligible to make public offerings of securities, must file a certificate of incorporation to establish their legal existence, and are taxed as corporations rather than partnerships.

Question 18

Fact Pattern 39-1A 
Mountaintop Clearview Corporation authorizes Niles,its employee,to oversee its timber operation.In the course of his employment,Niles disposes of the operation's waste illegally.Orson is a Mountaintop shareholder.
-Refer to Fact Pattern 39-1A.With respect to Mountaintop and Niles,liability for this crime most likely rests with

Accepted Answer

Both Mountaintop and Niles can be held liable for the illegal disposal of waste. As an employee of Mountaintop, Niles was acting within the scope of his employment when he engaged in this illegal activity. Therefore, Mountaintop can be held vicariously liable for Niles' actions. Additionally, Niles can also be held personally liable for his own illegal actions. Orson, as a shareholder, does not have any direct liability in this situation.

Question 19

Digitech is a foreign corporation,which means that Digitech

Accepted Answer

A foreign corporation is a company chartered in a state or country other than where it is doing business. Such a corporation may be required to obtain a certificate of authority to do business in the state(s) where it operates. Therefore, option C is the correct answer. Options A and D are incorrect as it does not necessarily mean that Digitech is an alien corporation or can only do business in foreign countries. Option B is partially correct, but does not fully explain the nature of a foreign corporation.

Question 20

Skyla and Terry want to form and do business as Unique Boutique Corporation.Most statutes governing the formation and use of corporations are guided by

Accepted Answer

The Revised Model Business Corporation Act is a model set of laws drafted by legal experts to provide a uniform set of guidelines for creating and operating corporations. Many states have adopted this model act or a modified version of it, making it the most commonly used framework for establishing and regulating corporations in the United States.

Quiz 39: B: Corporate Formation and Financing