2.8 Unit 6 - Chapter 33

Which of the following is NOT a characteristic of the corporate form of doing business?
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Terms in this set (21)
Which of the following is NOT a characteristic of the corporate form of doing business?
Informal organization
All of the following are characteristics of a corporation EXCEPT:
it is usually managed by its owners
A corporation is considered a citizen:
of the state in both where it has a principal office and its incorporation
Which of the following is correct regarding a foreign corporation?
A foreign corporation transacting business within a particular state without having first qualified cannot use the state court to maintain a lawsuit until the corporation obtains a certificate of authority.
A promoter of a corporation has a fiduciary duty to:
any other promoters of that corporation
The possible consequences of a defective incorporation include all of the following except:
the association always being liable for an obligation
Which of the following is the basic governing document of a corporation?
Articles of incorporation
The incorporators would typically do which of the following?
Sign the charter
Whether a corporation is a de facto corporation may be challenged by:
the state in which the business attempted to incorporate
Courts have responded by piercing the veil when the shareholders have:
All of these are correct
James, a promoter of Unobtainium Corporation, has a fiduciary duty toboth the other promoters and the initial shareholders of Unobtainium CorporationUse of "Evans & Hall, Ltd." as a corporate name would be:permissible as long as it is distinguishable from the name of any domestic corporation or any foreign corporation authorized to do business within the state.Wyatt, the sole stockholder of International Travel Corporation, wrongfully used the corporation to avoid a personal liability. A court's disregarding the corporate entity and holding Wyatt personally liable is called:piercing the corporate veil.Claire opened Claire's Beauty Parlor in her home. She solicited funds to begin the business from Jack, who believed that the business was incorporated. Claire had, in fact, never filed the papers. One day, Claire fell asleep while giving a customer a permanent and the solution caused her customer severe burns. The customer sued the Beauty Parlor for $500,000, an amount enormously in excess of the business assets. Under the Revised Act, what would be the result?Jack would not be personally liable, but Claire would.The president of Hi-Glow Cosmetics sends his top chemist to Hi-Glow's competitor's labs to steal its formula for shiny lipstick. The chemist gets caught and is sent to jail. Can Hi-Glow be found to be criminally liable?Yes, since the president authorized the crime.Deer Haven, Inc. is a corporation incorporated in Arkansas and has its principal office in San Antonio, Texas. Which of the following is true of Deer Haven, Inc.'s citizenship status?Deer Haven, Inc. is a citizen of Arkansas and Texas, for the purpose of determining diversity of citizenship.Carlos is a promoter of Debonair Enterprises, Inc. To whom, if any, does Carlos owe a fiduciary duty?Carlos owes a fiduciary duty to any other promoters of Debonair Enterprises.Robert approaches you and seeks to form a corporation. He asks you which document should he create to govern the corporation. What do you tell him?Create articles of incorporation.Shareholders of Tridential, Inc. are worried that the court will "pierce" its corporate veil and hold the shareholders liable. Which of the following factors will a court consider in deciding whether to pierce Tridential, Inc.'s corporate veil?All of these are correct.Michael is truck driver employed by Simmons Construction Corporation. While operating the truck during business hours, Michael negligently crashes into Peter. Is Simmons Construction Corporation liable?Yes, Simmons Construction Corporation is liable under the doctrine of respondeat superior.Barbara, a self-made millionaire, wants to start a corporation exclusively for charitable and educational purposes. What type of corporation should Barbara form?Non-profit corporation