Business Law II BA 304-01: N/A
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Chapter 44 - Corporation Formation - Review

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1) A corporation is an artificial person that is created by governmental action.

2) Debts of a corporation are not the debts of the persons running the corporation or owning shares of stock in it.

3) Shareholders ordinarily cannot be sued for corporate liabilities.

4) A California corporation is a foreign corporation with respect to the remaining 49 states of the United States.

5) Most states have a general corporation code, and any persons satisfying the requirements of that code may form a corporation.

6)A corporation is considered a person for purposes of the due process clause of the U.S. Constitution.

7) Subject to constitutional limitations, corporations may be regulated by state statutes.

8) For the purpose of determining the right to bring a lawsuit in federal court, a corporation is deemed to be a citizen of the state in which it has been incorporated.

9) The corporate form of business continues regardless of changes in stock ownership.

10) Corporations my borrow money by issuing bonds.

11) An act that is beyond the scope of the powers of a corporation is called an ultra vires act.

12) A public corporation is a corporation established for governmental purposes and to exercise the powers of government.

13) A corporation that does business in the state in which it was created is called a domestic corporation.

14) For the purpose of lawsuits in federal courts, a Delaware corporation that is owned by residents of Minnesota and has its principal place of business in Ohio is deemed to be a citizen of Delaware and Ohio.

15) A corporation must have a name.

16) Perpetual succession with respect to a corporation means that the corporate existence is not affected by changes in stock ownership regardless of whether the charter states that the corporation is to exist indefinitely or for a limited period of time.

15) The rules and regulations used to govern the affairs of the corporation are called bylaws.

16) Under recent statutes, the articles of incorporation must contain the name of the corporation, name and address of each incorporator, and number of shares the corporation is authorized to issue. 17) The Revised Model Business Corporation Act has eliminated the need for a certificate of incorporation.

18) Where a corporation is properly formed, it is called a corporation de jure.

19) Under the Revised Model Business Corporation Act, the secretary of state may force the corporation to give up its charter.

20) After a corporation is dissolved, a contract made by an officer of the dissolved corporation cannot be enforced against the other party to the contract.

21) Judicial resolution of a corporation may occur when management is deadlocked and the deadlock cannot be broken by the shareholders.

22) If there is a consolidation of corporations A, B, and C, corporations A, B, and C cease to exist and a new corporation takes their place.

23) When two corporations merge, one of the corporations absorbs the other.

24) In a merger situation, the right of a dissenting shareholder is to have its shares appraised and purchased by the corporation.

25) If a wire manufacturing company owned a mill to produce the metal used in making the wire, this relationship between the companies would be best described as an integrated industry.

26) An enterprise that conducts business following a merger or consolidation succeeds to all of the rights of the predecessor, all of the property of the predecessor, and all of the debts and liabilities of the predecessor.

27) A successor enterprise is not subject to the contract obligations of the former business if a corporation merely purchases the assets of another business.

28) For the purpose of determining the right to bring a lawsuit in federal court, a corporation is deemed to be a citizen of the state in which it has been incorporated.

29) The corporate form of business continues regardless of changes in stock ownership.

30) Corporations my borrow money by issuing bonds.

31) Under the modern incorporation statutes, there are very few actions of corporations that will be considered ultra vires in nature.

32) If a corporation assumes a contract made by a promoter with knowledge that the promoter had fraudulently induced the other party to enter into the contract, the corporation is liable to such other party for the fraud of the promoter.

33) A corporation may be an incorporator of another corporation.

34) Under the Revised Model Business Corporation Act (RMBCA), corporate existence begins when the articles of incorporation are filed with the secretary of state.

35) A de facto corporation is accorded legal recognition despite some recognized defect in its incorporation.

36) A corporation may be judicially dissolved when its management is deadlocked,and the deadlock cannot be broken by the shareholders.

37) A conglomerate is a relationship and not a form of corporation.

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