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Assessment, Ch. 41-44
Test Description: Business Law II, Spring 2020. Test over chapters 41-44.
Instructions: Answer all questions to get your test result.
1) Doing intrastate business without filing with the appropriate state office will likely subject a foreign business to a fine.
A
False
B
True
C
n/a
D
n/a
2) Outland Corporation is incorporated in Wyoming, where it has its executive office. It has a manufacturing plant in Utah, and a warehouse in New Mexico, where most of its sales are made. Outland is subject to taxation in:
A
Wyoming and New Mexico only
B
Wyoming, Utah, and New Mexico
C
Wyoming and Utah only
D
New Mexico only
3) Which of the following is correct about the history of corporations?
A
In the late 18th century, general incorporation statutes emerged in the United States.
B
Early American corporations received special privileges from state legislatures.
C
From the 18th century onward, France started giving privileges of incorporation to mercantile ventures.
D
In England, the corporate form was used extensively after the 16th century.
4) Famous British trading companies were the forerunners of the modern corporation and primarily sought corporate status because the government granted them:
A
full dominion over natural resources.
B
taxation powers.
C
monopolies and governmental powers.
D
immunity from civil and criminal liability.
5) Greater contacts are needed to subject a corporation to property taxation in a state than are needed to subject it to state income and sales taxation.
A
True
B
False
6) An S corporation election requires the consent of _____ of its shareholders.
A
the majority
B
none
C
all
D
two-thirds
7) A state may impose its laws on a foreign corporation if such imposition does not violate the Constitution of the United States, notably the Due Process Clause of the Fourteenth Amendment and the Commerce Clause. The leading case in this area is the _
A
International Shoe
B
World-Wide Volkswagen Corp. v. Woodson
C
Ryan v. Cerullo
D
Katris v. Carroll
8) The law of piercing the corporate veil is an example of a _____ law protecting the creditors of corporations.
A
commerce
B
constitutional
C
statutory
D
common
9) Nearly all corporations whose veils are pierced are:
A
close corporations
B
publicly held corporations
C
government-owned corporations
D
nonprofit corporations
10) Which class of corporation has members rather than shareholders?
A
for-profit corporation
B
publicly held corporation
C
not-for-profit corporation
D
S corporation
11) A promoter:
A
is not liable on a preincorporation contract after the corporation's adoption of the contract.
B
automatically becomes one of the initial directors of the corporation.
C
may have liability on the contracts he negotiates on behalf of the prospective corporation.
D
does not hold any liability to third parties on preincorporation contracts.
12) A party who makes a preincorporation contract with a corporate promoter is liable on the preincorporation contract:
A
only after the corporation's articles have been filed with the secretary of state.
B
only when the promoter is liable on the contract.
C
when the party agrees to look only to the prospective corporation for performance of the contract.
D
only after the corporation's board of directors adopts the contract after the corporation has come into existence.
13) Because the articles of incorporation embody the basic contract between a corporation and its shareholders, shareholders must approve most changes in the articles. Which of the following is an example of such changes in the article?
A
Place of shareholder meeting
B
Amount of annual dividend
C
Date of shareholder meeting
D
Increase in the number of authorized shares
14) Short-term certificated options that are usually transferable are referred to as:
A
warrants
B
bonds
C
options
D
rights
15) A ______ exists when the incorporators fail in some material respect to comply with all the mandatory provisions of the incorporation statute yet comply with most mandatory provisions.
A
false corporation
B
de jure corporation
C
de facto corporation
D
corporation by estoppel
16) What is the term for an agreement that makes the shareholder sell his shares back to the corporation at a price determined in the agreement and binds the corporation to purchase the shares?
A
international agent agreement
B
fiduciary agreement
C
option agreement
D
buy and sell agreement
17) Two corporations in a state may have the same name.
A
true
B
false
18) Which of the following is not considered a transfer restriction?
A
fiduciary agreement
B
provisions disqualifying purchasers
C
option agreement
D
right of first refusal
19) A clause in a contract that states that a promoter of a contract will cease to be liable under the contract once a corporation has adopted it, is called:
A
an automatic novation clause
B
a byaws clause
C
an automatic agency clause
D
an incorporation clause
20) Any corporation that has complied with all _______ is called a de jure corporation.
A
mandatory bylaw provisions
B
mandatory conditions subsequent
C
mandatory statutory provisions
D
mandatory conditions precedent
*select an answer for all questions
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