BUL 5810 - CORPORATIONS EXAM QUESTIONS WITH CORRECT ANSWERS GRADED A+
Which of the following is NOT a characteristic of the corporate form of doing business? - Answers
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. - Answers It is usually managed by its owners
A corporation is considered a citizen: - Answers 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. -
Answers 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: - Answers 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.
c. the associates are held personally liable to a third party.
d. a third party asserts it is not liable to the association. - Answers the association always being liable for
an obligation
Which of the following is the basic governing document of a corporation? - Answers Articles of
Incorporation
, The incorporators would typically do which of the following?
a. Purchase outstanding shares.
b. Assemble the assets.
c. Sign the charter. - Answers Assemble the assets
Whether a corporation is a de facto corporation may be challenged by: - Answers 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. - Answers ALL OF THESE ARE CORRECT
James, a promoter of Unobtainium Corporation, has a fiduciary duty to: - Answers Both the other
promoters and the initial shareholders of Unobtainium Corporation
Use of "Evans & Hall, Ltd." as a corporate name would be: - Answers 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: - Answers piercing the corporate veil
Claire opened Claire's Beauty Parlor in her home. She solicited funds to begin the business from Jack,
who believed that the business was incorporated. Claire had, in fact, never filed the papers. One day,
Claire fell asleep while giving a customer a permanent and the solution caused her customer severe
burns. The customer sued the Beauty Parlor for $500,000, an amount enormously in excess of the
business assets. Under the Revised Act, what would be the result? - Answers Jack would not be
personally liable, but Claire would
Which of the following is NOT a characteristic of the corporate form of doing business? - Answers
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. - Answers It is usually managed by its owners
A corporation is considered a citizen: - Answers 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. -
Answers 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: - Answers 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.
c. the associates are held personally liable to a third party.
d. a third party asserts it is not liable to the association. - Answers the association always being liable for
an obligation
Which of the following is the basic governing document of a corporation? - Answers Articles of
Incorporation
, The incorporators would typically do which of the following?
a. Purchase outstanding shares.
b. Assemble the assets.
c. Sign the charter. - Answers Assemble the assets
Whether a corporation is a de facto corporation may be challenged by: - Answers 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. - Answers ALL OF THESE ARE CORRECT
James, a promoter of Unobtainium Corporation, has a fiduciary duty to: - Answers Both the other
promoters and the initial shareholders of Unobtainium Corporation
Use of "Evans & Hall, Ltd." as a corporate name would be: - Answers 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: - Answers piercing the corporate veil
Claire opened Claire's Beauty Parlor in her home. She solicited funds to begin the business from Jack,
who believed that the business was incorporated. Claire had, in fact, never filed the papers. One day,
Claire fell asleep while giving a customer a permanent and the solution caused her customer severe
burns. The customer sued the Beauty Parlor for $500,000, an amount enormously in excess of the
business assets. Under the Revised Act, what would be the result? - Answers Jack would not be
personally liable, but Claire would
