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Exam 33: Life and Death of a Corporation

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Question 21

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Zach decided to incorporate his business under the name of "Zamm." In addition to "Zamm," the Model Act requires that Zach include one of the following words: "corporation," "incorporated," "limited," or "company" or an abbreviation thereof.

A) True
B) False

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Question 22

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A corporation is not allowed to issue dividends to shareholders unless it is solvent.

A) True
B) False

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Question 23

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When a company dissolves,preferred stockholders typically have the right to receive their share of corporate assets before common shareholders.

Which of the following states that a corporation cannot undertake any transaction unless its charter permits it?

Wizardry Corporation's purpose clause in its charter states,"To operate a home-cleaning service business." After a few years of successful operation,Wizardry is offered the challenge of landscaping a neighboring business.If Wizardry accepts the offer,it would be violating its charter under

Common stock is the last stock in line for any corporate payouts,including dividends and liquidation payments.

Sara decided to incorporate her business under the name Gomo,Inc.Before Gomo was incorporated,Sara signed a contract in the name of Gomo,Inc.to lease a store front.Sara did not tell the other party that Gomo was not yet formed.Sara is personally liable on the lease.

When a corporation accepts legal responsibility for a contract,it is called novation.

MegaCorp is incorporated under Delaware law.It is registered to do business in New York.Legally,in New York MegaCorp is known as what kind of corporation?

MegaCorp purchased 10,000 shares of its own stock that had previously been owned by private investors.The stock MegaCorp repurchased is called

The officers of a corporation are

A business corporation can be incorporated under either state law or federal law.

TriColor,Inc.is doing business in Minnesota,West Virginia,and Oklahoma.TriColor must register in all three of these states.

Terminating a corporation is a three-step process: dissolution,winding up,and termination.

Incorporators are required to sign the charter,deliver it to the proper state officials,and purchase a certain percentage of the initial stock offering.

The directors of MegaCorp learn that an outsider is planning on buying enough voting stock to get herself elected to the board of directors.MegaCorp,which has cumulative voting,quickly puts together a vote of shareholders to eliminate the company's cumulative voting procedure.The shareholders vote to do away with cumulative voting.The outsider,Dawn,who wanted to get herself elected to MegaCorp's board,claims that the company has committed an illegal act.Is she right?

In incorporating E-prise,the promoter gave an incorrect ZIP Code for the registered agent.All of the other requirements for incorporation were met.E-prise is a(n)

Fashions,Inc.has 12 shareholders.The company is subject to the Model Act.What officers is Fashions,Inc.required to have?

Hank owns 100 shares of cumulative preferred stock in Wayside Transport,Inc.Kelsey owns 50 non-cumulative preferred shares,and Oleg owns 120 shares of common stock.Wayside does not pay dividends in 2007.In 2009

Fashions,Inc.has 12 shareholders.There is no shareholder agreement concerning the board of directors.The company is subject to the Model Act.How many directors is Fashions,Inc.required to have?