In simple terms, an S corporation can be defined as a corporation:
a. whose shareholders are taxed like shareholders but who face full, significant liability.
b. regulated by the securities authorities.
c. whose shareholders have limited liability but avo
c. whose shareholders have limited liability but avoid corporate income taxes.
Articles of incorporation must contain:
a. resolutions of the board of directors regarding accepting the contracts of the incorporators.
b. the name or the corporation and its registered agent.
c. a list of officers of the corporation and their qualificat
b. the name or the corporation and its registered agent.
Stock may be described as:
a. an ownership interest in the corporation.
b. a document describing the ownership and management structure of the corporation.
c. a debt owed by the government to the shareholder.
d. a debt owed by the corporation to the share
a. an ownership interest in the corporation.
A corporation whose shares are held by members of a family most likely is a:
a. nonprofit corporation.
b. private corporation.
c. close corporation.
d. benefit corporation.
c. close corporation.
Acts of a corporation that are beyond the authority given to it by its charter are called:
a. implied powers.
b. piercing the corporate veil.
c. express powers.
d. ultra vires acts.
d. ultra vires acts.
A major power held by shareholders is the power to:
a. manage and supervise daily operations of the corporation.
b. amend the articles of incorporation or the corporate bylaws.
c. declare dividends.
d. appoint corporate officers.
b. amend the articles of incorporation or the corporate bylaws.
Preventing insider trading (when someone uses information that is not available to the public to buy or sell securities to make a profit or avoid a loss) is one of the major goals of:
a. the Securities Exchange Act of 1934.
b. the Insider Trading Penalty
a. the Securities Exchange Act of 1934.
When a corporation suffers a wrong as a result of actions taken or not taken by the corporate directors, one way to address the harm is through:
a. a shareholder's derivative suit.
b. the use of stock warrants.
c. holding a shareholders' meeting to elect
a. a shareholder's derivative suit.
Shareholders have a right to inspect:
a. records that relate to a shareholder's personal account.
b. only the corporation's public records.
c. the corporate books and records for any or no reason.
d. the corporate books and records, but only for a proper
d. the corporate books and records, but only for a proper purpose.
The exclusion of minority shareholders from the benefits of participating in the firm by majority shareholders is:
a. necessary under certain circumstances.
b. permissible only in close corporations.
c. a breach of the shareholders' fiduciary duty.
d. a c
c. a breach of the shareholders' fiduciary duty.
Rena incorporates her business, Rena's Rhinestones, in her home state of Maryland. She wants to expand and sell some of her baubles in Virginia. In Virginia, her company will be considered:
a. an open corporation, so she can do business in any state that
c. a foreign corporation, because her business has been incorporated in another state.
Keenan wants to incorporate his business. He buys business cards and labels with the name "Keenan's Kwips" on them and begins selling gag gifts. Keenan follows the rules for incorporation in his state, including a statement that he is the sole shareholder
a. properly formed corporation.
Trey owns 250 shares of common stock in a toy store company. This means that he owns a percentage of the company based on the proportion of shares he owns out of the total shares issued by the company. With this ownership he also acquires rights to:
a. vo
b. vote.
Carla's cupcake business could really grow if she had enough money to expand. To generate funds, she sells shares in the company to her two brothers, her cousin, and her friend. Her company likely would be considered:
a. a nonprofit corporation.
b. a bene
c. a close corporation.
Mark is the CEO of TruLawn Landscaping. The stated purpose of TruLawn is to do yard and garden work. Mark contracts with Judah in TruLawn's name to use TruLawn trucks to help move Judah's office. Mark likely:
a. has acted within his implied powers.
b. has
c. has committed an ultra vires act.
Leslie is starting up a new business, and she needs to raise additional capital to get it going. Her associate, Lenny, set up an Internet site with information about the company in an attempt to attract investors. This is an example of:
a. issuing preferr
b. crowdfunding.
Suzy signs a written agreement with Phillip, giving Phillip the right to cast Suzy's votes for a certain group of people nominated for the Syllibar Corporation board of directors. This agreement between Suzy and Phillip is known as a:
a. proxy.
b. derivat
a. proxy.
Lysco, Inc., gives to all 15,000 of its shareholders the right to purchase newly issued shares of Lysco stock in proportion to the percentage of shares they currently own and before anyone else is offered the shares. This right is known as a(n):
a. warran
d. preemptive right.
Annie owns stock in a company and feels that her stock has lost significant value as a result of actions taken by the corporate directors. When a corporation suffers a wrong as a result of its directors' conduct, one way to address the harm is through:
a.
d. a shareholder's derivative suit.
Mercado Corporation is voting for two directors. Candace owns 500 shares of Mercado stock. Because Mercado uses cumulative voting to elect its directors, Candace has:
a. 1,000 votes.
b. 500 votes.
c. 2,000 votes.
d. 1,500 votes.
a. 1,000 votes.