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BUL 5810 – CORPORATIONS Exam
Questions With Correct Answers
Which of the following is NOT a characteristic of the corporate form of doing business? -
answer✔✔Informal organization
All of the following are characteristics of a corporation EXCEPT:
a. it has perpetual existence.
b. it is a legal entity of its own.
c. it is able to be sued and to sue.
d. it is usually managed by its owners. - answer✔✔It is usually managed by its owners
A corporation is considered a citizen: - answer✔✔of the state in both
(1) where it has a principal office
(2) its incorporation
Which of the following is correct regarding a foreign corporation?
a. A foreign corporation is incorporated in a foreign country.
b. Failure to obtain a certificate of authority to transact business in the state impairs the validity
of a contract entered into by the corporation.
c. A foreign corporation transacting business within a particular state without having first
qualified cannot use the state court to maintain a lawsuit until the corporation obtains a
certificate of authority. - answer✔✔A foreign corporation transacting business within a
particular state without having first qualified cannot use the state court to maintain a lawsuit until
the corporation obtains a certificate of authority
A promoter of a corporation has a fiduciary duty to: - answer✔✔any other promoters of that
corporation
The possible consequences of a defective incorporation include all of the following except:
a. the state may bring an action against the association for involuntary dissolution.
b. the association always being liable for an obligation.
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c. the associates are held personally liable to a third party.
d. a third party asserts it is not liable to the association. - answer✔✔the association always being
liable for an obligation
Which of the following is the basic governing document of a corporation? - answer✔✔Articles
of Incorporation
The incorporators would typically do which of the following?
a. Purchase outstanding shares.
b. Assemble the assets.
c. Sign the charter. - answer✔✔Assemble the assets
Whether a corporation is a de facto corporation may be challenged by: - answer✔✔the state in
which the business attempted to incorporate
Courts have responded by piercing the veil when the shareholders have:
a. not followed the formalities of corporate procedures.
b. not provided an adequate financial basis for the business.
c. used the corporation to defraud. - answer✔✔ALL OF THESE ARE CORRECT
James, a promoter of Unobtainium Corporation, has a fiduciary duty to: - answer✔✔Both the
other promoters and the initial shareholders of Unobtainium Corporation
Use of "Evans & Hall, Ltd." as a corporate name would be: - answer✔✔permissible as long as it
is distinguishable from the nae of any other domestic corporation or any foreign corporation
authorized to do business within the state
Wyatt, the sole stockholder of International Travel Corporation, wrongfully used the corporation
to avoid a personal liability. A court's disregarding the corporate entity and holding Wyatt
personally liable is called: - answer✔✔piercing the corporate veil
BUL 5810 – CORPORATIONS Exam
Questions With Correct Answers
Which of the following is NOT a characteristic of the corporate form of doing business? -
answer✔✔Informal organization
All of the following are characteristics of a corporation EXCEPT:
a. it has perpetual existence.
b. it is a legal entity of its own.
c. it is able to be sued and to sue.
d. it is usually managed by its owners. - answer✔✔It is usually managed by its owners
A corporation is considered a citizen: - answer✔✔of the state in both
(1) where it has a principal office
(2) its incorporation
Which of the following is correct regarding a foreign corporation?
a. A foreign corporation is incorporated in a foreign country.
b. Failure to obtain a certificate of authority to transact business in the state impairs the validity
of a contract entered into by the corporation.
c. A foreign corporation transacting business within a particular state without having first
qualified cannot use the state court to maintain a lawsuit until the corporation obtains a
certificate of authority. - answer✔✔A foreign corporation transacting business within a
particular state without having first qualified cannot use the state court to maintain a lawsuit until
the corporation obtains a certificate of authority
A promoter of a corporation has a fiduciary duty to: - answer✔✔any other promoters of that
corporation
The possible consequences of a defective incorporation include all of the following except:
a. the state may bring an action against the association for involuntary dissolution.
b. the association always being liable for an obligation.
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c. the associates are held personally liable to a third party.
d. a third party asserts it is not liable to the association. - answer✔✔the association always being
liable for an obligation
Which of the following is the basic governing document of a corporation? - answer✔✔Articles
of Incorporation
The incorporators would typically do which of the following?
a. Purchase outstanding shares.
b. Assemble the assets.
c. Sign the charter. - answer✔✔Assemble the assets
Whether a corporation is a de facto corporation may be challenged by: - answer✔✔the state in
which the business attempted to incorporate
Courts have responded by piercing the veil when the shareholders have:
a. not followed the formalities of corporate procedures.
b. not provided an adequate financial basis for the business.
c. used the corporation to defraud. - answer✔✔ALL OF THESE ARE CORRECT
James, a promoter of Unobtainium Corporation, has a fiduciary duty to: - answer✔✔Both the
other promoters and the initial shareholders of Unobtainium Corporation
Use of "Evans & Hall, Ltd." as a corporate name would be: - answer✔✔permissible as long as it
is distinguishable from the nae of any other domestic corporation or any foreign corporation
authorized to do business within the state
Wyatt, the sole stockholder of International Travel Corporation, wrongfully used the corporation
to avoid a personal liability. A court's disregarding the corporate entity and holding Wyatt
personally liable is called: - answer✔✔piercing the corporate veil
