1 | P a g e | © copyright 2024/2025 | Grade A+
Bule GMU Final Exam Study Guide
Questions and Correct Verified
Answers Latest Version
Model Business Corporation Act (MBCA)
✓ A codification of modern corporation law that has influential in the
drafting and revision of state corporation statutes.
RMBCA
✓ Revised model business corporation act.
Corporation
✓ A legal entity formed in compliance with statutory requirements that is
distinct from it's shareholder-owners. It can be owned by a single
person or millions of shareholders. Recognized as a 'person' and enjoys
many of the same rights and privileges under state and federal law
that people do.
Board of Directors
Master01 | September, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ Responsible for the overall management of the firm. members are
elected by the shareholders. They hire the corporate officers and other
employees to run the daily business operations, determines the capital
structure of the corporation, and declares dividends. Ultimate authority
in any corporation. No individual director can act as an agent to bind
the corporation. The number of directors is stated in the corporation's
bylaws. Directors usually serve a term of a year. Directors can be
removed for "cause".
Corporate shareholders
✓ Own a piece of the corporation. They are not normally personally liable
for the obligations of the corportation beyond the extent of their own
investments.
Dividend
✓ A distribution to corporate shareholders of corporate profits or income,
disbursed in proportion to the number of shares held. Double taxation is
a part of receiving these profits.
Retained Earnings
Master01 | September, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ The portion of a corporation's profits that has not been paid out as
dividends to shareholders.
Criminal acts and liability related to corporations
✓ A corporation may be held liable for the criminal acts of it's agents and
employees provided the punishment is one that can be applied to the
corporation.
Classification of corporations
✓ Can be based on its location, purpose, and ownership characteristics.
Domestic Corporation
✓ In a given state, a corporation that does business in, and is organized
under the law of, that state.
Foreign Corporation
✓ In a given state, a corporation that does business in the state without
being incorporated therein.
Alien Corporation
Master01 | September, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ A designation in the United States for a corporation formed in another
country but doing business in the United States.
Certificate of Authority
✓ A corporation doesn't have an automatic right to do business in
another state, so in some instances they must get a certificate of
authority.
Public Corporation
✓ Formed by the government to meet some political or governmental
purpose. (EX: postal service) Same as a public held corporation whose
shares are publicly traded in securities markets, such as the new york
stock exchange.
Private Corporation
✓ Created wholly or in part for private benefit.
Nonprofit Corporation
✓ Corporations formed for another purpose than making profits. Example:
Private hospitals, educational institutions.
Master01 | September, 2024/2025 | Latest update
Bule GMU Final Exam Study Guide
Questions and Correct Verified
Answers Latest Version
Model Business Corporation Act (MBCA)
✓ A codification of modern corporation law that has influential in the
drafting and revision of state corporation statutes.
RMBCA
✓ Revised model business corporation act.
Corporation
✓ A legal entity formed in compliance with statutory requirements that is
distinct from it's shareholder-owners. It can be owned by a single
person or millions of shareholders. Recognized as a 'person' and enjoys
many of the same rights and privileges under state and federal law
that people do.
Board of Directors
Master01 | September, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ Responsible for the overall management of the firm. members are
elected by the shareholders. They hire the corporate officers and other
employees to run the daily business operations, determines the capital
structure of the corporation, and declares dividends. Ultimate authority
in any corporation. No individual director can act as an agent to bind
the corporation. The number of directors is stated in the corporation's
bylaws. Directors usually serve a term of a year. Directors can be
removed for "cause".
Corporate shareholders
✓ Own a piece of the corporation. They are not normally personally liable
for the obligations of the corportation beyond the extent of their own
investments.
Dividend
✓ A distribution to corporate shareholders of corporate profits or income,
disbursed in proportion to the number of shares held. Double taxation is
a part of receiving these profits.
Retained Earnings
Master01 | September, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ The portion of a corporation's profits that has not been paid out as
dividends to shareholders.
Criminal acts and liability related to corporations
✓ A corporation may be held liable for the criminal acts of it's agents and
employees provided the punishment is one that can be applied to the
corporation.
Classification of corporations
✓ Can be based on its location, purpose, and ownership characteristics.
Domestic Corporation
✓ In a given state, a corporation that does business in, and is organized
under the law of, that state.
Foreign Corporation
✓ In a given state, a corporation that does business in the state without
being incorporated therein.
Alien Corporation
Master01 | September, 2024/2025 | Latest update
, 1 | P a g e | © copyright 2024/2025 | Grade A+
✓ A designation in the United States for a corporation formed in another
country but doing business in the United States.
Certificate of Authority
✓ A corporation doesn't have an automatic right to do business in
another state, so in some instances they must get a certificate of
authority.
Public Corporation
✓ Formed by the government to meet some political or governmental
purpose. (EX: postal service) Same as a public held corporation whose
shares are publicly traded in securities markets, such as the new york
stock exchange.
Private Corporation
✓ Created wholly or in part for private benefit.
Nonprofit Corporation
✓ Corporations formed for another purpose than making profits. Example:
Private hospitals, educational institutions.
Master01 | September, 2024/2025 | Latest update
