TJ_Comp 20_TB_Ch44

TJ_Comp 20_TB_Ch44 - Chapter 44—CORPORATE FORMATION TRUE/FALSE 1 A corporation is an artificial person that is created by governmental action ANS

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Unformatted text preview: Chapter 44—CORPORATE FORMATION TRUE/FALSE 1. A corporation is an artificial person that is created by governmental action. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. Debts of a corporation are not the debts of the persons running the corporation or owning shares of stock in it. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. Shareholders ordinarily cannot be sued for corporate liabilities. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. A California corporation is a foreign corporation with respect to the remaining 49 states of the United States. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. The shares of a close corporation always are held by a single individual. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 6. S corporations have the benefits of limited liability as in partnerships and are taxed as corporations. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. A corporation that is formed to create a loss for tax accounting purposes is called a nonprofit corpora- tion. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 8. Most states have a general corporation code, and any persons satisfying the requirements of that code may form a corporation. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 9. A corporation is considered a person for purposes of the due process clause of the U.S. Constitution. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 10. Subject to constitutional limitations, corporations may be regulated by state statutes. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. 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. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 12. The corporate form of business continues regardless of changes in stock ownership. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 13. A corporation may properly exist without a name. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 14. A corporate seal is required in order for the corporation to enter into a binding contract. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 15. Bylaws must only be approved by the board of directors; then need not be approved by the sharehold- ers. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 16. Corporations my borrow money by issuing bonds. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 17. Treasury stock consists of those share of stock held by a bank. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 18. An act that is beyond the scope of the powers of a corporation is called an ultra vires act. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 19. Under the modern incorporation statutes, there are very few actions of corporations that will be con- sidered ultra vires in nature....
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This note was uploaded on 02/22/2012 for the course BUS BUS212 taught by Professor Manney during the Spring '12 term at FSU.

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TJ_Comp 20_TB_Ch44 - Chapter 44—CORPORATE FORMATION TRUE/FALSE 1 A corporation is an artificial person that is created by governmental action ANS

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