Question 1

The corporation is a creature of statute.

Accepted Answer

A) True 
 B)False

Question 2

Ned and Olsen want to form and do business as a corporation-Pastries & Pies Inc. Its existence depends generally on

Accepted Answer

A)   ​city or county corporate codes.
B)   ​the Entrepreneur's Corporate Handbook.
C)   ​the federal Administrative Procedure Act.
D)   ​state law.E) A) and D)
F) All of the above

Question 3

Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is

Accepted Answer

A)   ​a natural person.
B)   ​a tangible thing.
C)   ​an artificial being.
D)   ​a visible contemplation.E) A) and C)
F) A) and B) C

Question 4

Express powers of a corporation can be found in state corporation statutes.

Accepted Answer

A) True 
 B)False

Question 5

PrimarySource.com Corporation is a new online, textbook, and school supply business. How can PrimarySource.com obtain capital to finance its operations?

Accepted Answer

Generally, to obtain capital, a corporat...

Question 6

A corporation is not liable for the misconduct of its agents, officers, or employees.

Accepted Answer

A) True 
 B)False

Question 7

Pro Audio, Inc., would like to change its corporate status to that of an S corporation. To qualify, Pro Audio must​

Accepted Answer

A)   ​be a domestic corporation.
B)   ​have more than one hundred shareholders.
C)   ​be a benefit corporation.
D)   ​all of the choices.E) All of the above
F) A) and B) A

Question 8

Rob owns Solar Panels Corporation. He uses Solarl's funds to pay his personal expenses, creates Thermal Power Inc. to engage in the same business as Solar, transfers Solar's assets to Thermal, and petitions Solar into bankruptcy. This most likely warrants

Accepted Answer

A)   ​a bonus to Rob for financial maneuvers.
B)   ​a discharge for Solar in bankruptcy.
C)   ​a pierce of the corporate veil.
D)   ​a review of Thermal's articles of incorporation.E) B) and C)
F) A) and D)

Question 9

In many states, close corporations have more flexibility in determining their rules of operation.

Accepted Answer

A) True 
 B)False

Question 10

A court will not pierce the corporate veil of a corporation simply because it is too thinly capitalized.

Accepted Answer

A) True 
 B)False

Question 11

The incorporation of the town of Halfway, Oregon, is approved by the state. Halfway is

Accepted Answer

A)   ​a publicly held corporation.
B)   ​a public corporation.
C)   ​a private corporation.
D)   ​not a corporation.E) A) and C)
F) B) and D)

Question 12

The true ownership of a corporation is represented by common stock.

Accepted Answer

A) True 
 B)False

Question 13

Venture capital is capital provided to new business ventures by professional, outside investors.

Accepted Answer

A) True 
 B)False

Question 14

The shares of Home Mortgage Corporation are publicly traded in securities markets. Home Mortgage Corporation is

Accepted Answer

A)   ​a close corporation.
B)   ​a privately held corporation.
C)   ​a public corporation.
D)   ​a publicly held corporation.E) C) and D)
F) A) and B)

Question 15

Rita and Susan want to form and do business as Trips & Travel, Inc. They will serve as the firm's directors and officers, and will initially hold all of the stock in the company. A corporation is owned by

Accepted Answer

A)   ​the board of directors.
B)   ​the officers.
C)   ​the employees.
D)   ​the shareholders.E) All of the above
F) C) and D) D

Question 16

​An alien corporation is a corporation formed by a local corporation's competitor.

Accepted Answer

A) True 
 B)False

Question 17

Allen wants Wilderness Outfitters to join with him to form and do business as Canyon River Rafting Corporation. A corporation can be owned by

Accepted Answer

A)   ​natural persons only.
B)   ​other businesses only.
C)   ​other businesses or natural persons.
D)   ​none of the choices.E) A) and C)
F) B) and D)

Question 18

Burgers & Brews, Inc., files its articles of incorporation with the appropriate government agency. Not likely to appear in the articles is the name of

Accepted Answer

A)   ​each incorporator.
B)   ​each shareholder.
C)   ​the corporation.
D)   ​a registered agent.E) None of the above
F) C) and D)

Question 19

Interstate Paving, Inc., issues bonds. Bonds​

Accepted Answer

A)   ​are issued by businesses only.
B)   ​are referred to as fixed-income securities.
C)   ​feature voting rights.
D)   ​require periodic interest payments from their owners.E) A) and B)
F) C) and D)

Question 20

A corporate director "owns" the corporation.

Accepted Answer

A) True 
 B)False

Exam 39: Corporate Formation and Financing

The corporation is a creature of statute.

Correct AnswerverifiedShow Answer

Ned and Olsen want to form and do business as a corporation-Pastries & Pies Inc. Its existence depends generally on

Correct AnswerverifiedShow Answer

Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is

Correct AnswerverifiedC

Express powers of a corporation can be found in state corporation statutes.

Correct AnswerverifiedShow Answer

PrimarySource.com Corporation is a new online, textbook, and school supply business. How can PrimarySource.com obtain capital to finance its operations?

Correct AnswerverifiedGenerally, to obtain capital, a corporat...View AnswerShow Answer

A corporation is not liable for the misconduct of its agents, officers, or employees.

Correct AnswerverifiedShow Answer

Pro Audio, Inc., would like to change its corporate status to that of an S corporation. To qualify, Pro Audio must​

Correct AnswerverifiedA

Rob owns Solar Panels Corporation. He uses Solarl's funds to pay his personal expenses, creates Thermal Power Inc. to engage in the same business as Solar, transfers Solar's assets to Thermal, and petitions Solar into bankruptcy. This most likely warrants

Correct AnswerverifiedShow Answer

In many states, close corporations have more flexibility in determining their rules of operation.

Correct AnswerverifiedShow Answer

A court will not pierce the corporate veil of a corporation simply because it is too thinly capitalized.

Correct AnswerverifiedShow Answer

The incorporation of the town of Halfway, Oregon, is approved by the state. Halfway is

Correct AnswerverifiedShow Answer

The true ownership of a corporation is represented by common stock.

Correct AnswerverifiedShow Answer

Venture capital is capital provided to new business ventures by professional, outside investors.

Correct AnswerverifiedShow Answer

The shares of Home Mortgage Corporation are publicly traded in securities markets. Home Mortgage Corporation is

Correct AnswerverifiedShow Answer

Rita and Susan want to form and do business as Trips & Travel, Inc. They will serve as the firm's directors and officers, and will initially hold all of the stock in the company. A corporation is owned by

Correct AnswerverifiedD

​An alien corporation is a corporation formed by a local corporation's competitor.

Correct AnswerverifiedShow Answer

Allen wants Wilderness Outfitters to join with him to form and do business as Canyon River Rafting Corporation. A corporation can be owned by

Correct AnswerverifiedShow Answer

Burgers & Brews, Inc., files its articles of incorporation with the appropriate government agency. Not likely to appear in the articles is the name of

Correct AnswerverifiedShow Answer

Interstate Paving, Inc., issues bonds. Bonds​

Correct AnswerverifiedShow Answer

A corporate director "owns" the corporation.

Correct AnswerverifiedShow Answer

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C

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Generally, to obtain capital, a corporat...
View Answer

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Pro Audio, Inc., would like to change its corporate status to that of an S corporation. To qualify, Pro Audio must

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A

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D

An alien corporation is a corporation formed by a local corporation's competitor.

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Interstate Paving, Inc., issues bonds. Bonds

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