Assessment, Ch. 41-44 Question Preview (ID: 50696)

Business Law II, Spring 2020. Test Over Chapters 41-44. TEACHERS: click here for quick copy question ID numbers.

Doing intrastate business without filing with the appropriate state office will likely subject a foreign business to a fine.
a) True
b) False
c) n/a
d) n/a

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 Utah only
b) Wyoming and New Mexico only
c) New Mexico only
d) Wyoming, Utah, and New Mexico

Which of the following is correct about the history of corporations?
a) Early American corporations received special privileges from state legislatures.
b) In the late 18th century, general incorporation statutes emerged in the United States.
c) In England, the corporate form was used extensively after the 16th century.
d) From the 18th century onward, France started giving privileges of incorporation to mercantile ventures.

Famous British trading companies were the forerunners of the modern corporation and primarily sought corporate status because the government granted them:
a) monopolies and governmental powers.
b) immunity from civil and criminal liability.
c) full dominion over natural resources.
d) taxation powers.

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

An S corporation election requires the consent of _____ of its shareholders.
a) none
b) the majority
c) two-thirds
d) all

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) World-Wide Volkswagen Corp. v. Woodson
b) Katris v. Carroll
c) International Shoe
d) Ryan v. Cerullo

The law of piercing the corporate veil is an example of a _____ law protecting the creditors of corporations.
a) statutory
b) commerce
c) constitutional
d) common

Nearly all corporations whose veils are pierced are:
a) publicly held corporations
b) nonprofit corporations
c) close corporations
d) government-owned corporations

Which class of corporation has members rather than shareholders?
a) publicly held corporation
b) for-profit corporation
c) not-for-profit corporation
d) S corporation

A promoter:
a) does not hold any liability to third parties on preincorporation contracts.
b) may have liability on the contracts he negotiates on behalf of the prospective corporation.
c) is not liable on a preincorporation contract after the corporation's adoption of the contract.
d) automatically becomes one of the initial directors of the corporation.

A party who makes a preincorporation contract with a corporate promoter is liable on the preincorporation contract:
a) when the party agrees to look only to the prospective corporation for performance of the contract.
b) only after the corporation's board of directors adopts the contract after the corporation has come into existence.
c) only when the promoter is liable on the contract.
d) only after the corporation's articles have been filed with the secretary of state.

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) Date of shareholder meeting
b) Increase in the number of authorized shares
c) Place of shareholder meeting
d) Amount of annual dividend

Short-term certificated options that are usually transferable are referred to as:
a) rights
b) options
c) warrants
d) bonds

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) de facto corporation
b) corporation by estoppel
c) false corporation
d) de jure corporation

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) buy and sell agreement
b) international agent agreement
c) option agreement
d) fiduciary agreement

Two corporations in a state may have the same name.
a) true
b) false

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

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 incorporation clause
b) an automatic novation clause
c) a byaws clause
d) an automatic agency clause

Any corporation that has complied with all _______ is called a de jure corporation.
a) mandatory conditions subsequent
b) mandatory statutory provisions
c) mandatory bylaw provisions
d) mandatory conditions precedent

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