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Mgmt 429 > Chapter 43 > Flashcards

Chapter 43 Flashcards

Corporation Formation (70 cards)

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1
Q

A _____________ is an artificial being created by government grant, which for many purposes is treated as a natural person.

A

Corporation

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2
Q

Written approval from the state or national government for a corporation to be formed.

A

Certificate of incorporation

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3
Q

A corporation is formed by obtaining approval of a certificate of incorporation, _________ of _______, or a charter from the state or national government.

A

Articles of incorporation (same definition as certificate of incorporation)

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4
Q

Grant of authority from a government to exist as a corporation. Generally replaced today by a certificate of incorporation approving the articles of incorporation. This is known as a?

A

Charter

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5
Q

Corporations may be classified in terms of their? (three things)

A

Classifications of Corporations:

  • Relationship to the public
  • The source of their authority
  • The nature of their activities
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6
Q

A public corporation is a corporation that has been established for?

A

Governmental purposes and for the administration of public affairs.

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7
Q

A private corporation is a corporation organized for?

A

Charitable and benevolent purposes or for purposes of finance, industry, and commerce.

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8
Q

Quasi-public corporations are private corporations that

A

Furnish services on which the public is particularly dependent, for example, a gas and electric company.

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9
Q

Corporations formed by government that have been incorporated by the state in question as opposed to incorporation by another state are known as?

A

Authorities

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10
Q

A corporation that has been incorporated by the state in question as opposed to incorporation by another state is known as a?

A

Domestic corporation

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11
Q

A foreign corporation is a corporation that has been?

A

Incorporated under the laws of another state

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12
Q

Close corporations are corporations whose shares are held by?

A

A single shareholder or a small group of shareholders

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13
Q

Eleemosynary corporations are corporations organized for?

A

A charitable or benevolent purpose

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14
Q

A benefit corporation (B-corporation) is a?

A

For-profit corporation that sets a goal to create a public benefit while still providing economic returns to its investors

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15
Q

The power to govern; the power to adopt laws for the protection of the public health, welfare, safety and morals is known as?

A

Police Power

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16
Q

General corporation code

A

State’s code listing certain requirements for creation of a corporation

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17
Q

Is there such thing as “uniform” corporation act?

A

NO!

Most states have a general corporation code but no “uniform” corporation act.

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18
Q

The American Bar Association (ABA) published a?

A

Model Business Corporation Act (MBCA), to assist legislative bodies in the modernization of state corporation laws

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19
Q

Bylaws are?

A

Rules and regulations enacted by a corporation to govern the affairs of the corporation and its shareholders, directors, and officers.

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20
Q

Corporate stock that the corporation has reacquired is called

A

Treasury stock

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21
Q

Ultra vires is defined as a(n)?

A

Act or contract that the corporation does not have authority to do or make

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22
Q

A promoter is a person who

A

Plans the formation of the corporation and sells or promotes the idea to others

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23
Q

An incorporator is?

A

One or more natural persons or corporations who sign and file appropriate incorporation forms with a designated government official.

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24
Q

A corporation de jure is a corporation with?

A

A legal right to exist by virtue of law

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25
When the association is called a de facto corporation it is
Existing in fact as distinguished from as of right, as in the case of an officer or a corporation purporting to act as such without being elected to the office or having been properly incorporated
26
Corporation by estoppel is
A corporation that comes about when parties estop themselves from denying that the corporation exists.
27
The combining of two or more corporations in which the corporate existence of each one ceases and a new corporation is created is known as?
Consolidation (of corporations)
28
Merger (of corporations) takes place when the
Combining of corporations by which one absorbs the other and continues to exist, preserving its original charter and identity while the other corporation ceases to exist.
29
The relationship of a parent corporation to subsidiary corporations engaged in diversified fields of activity unrelated to the field of activity of the parent corporation describes a?
Conglomerate
30
Can corporations be sued?
Yes! Corporations can sue and be sued, but shareholders enjoy limited liability.
31
What must be obtained first before a corporation is formed?
Corporations are formed by obtaining (1) certificate of incorporation (2) articles of incorporation or a (3) charter from the government.
32
Public authorities are corporations formed by?
The government, they mainly provide public services
33
A corporation is domestic in its state of incorporation; making them?
Foreign in all other states
34
Transportation, banking, insurance and savings and loans are all services provided by?
Special service corporations
35
A corporation with a single shareholder or a small group of shareholders is called a?
Close Corporation
36
Corporations that allow the shareholders to be treated as partners for tax purposes and retain the benefit of limited liability under the corporate form are known as?
Subchapter-S Corporations
37
Is there a limit on the number of shareholders allowed in a Subchapter S corporation?
Yes, a subchapter s corporation is limited to 100 shareholders.
38
A corporation where the shareholders are taxed as partners is called
a subchapter s corporation
39
In a professional corporation all officers, directors and shareholders must be?
Members of the profession
40
Is there a shield of protection from personal liability for officers, directors and shareholders of a professional corporation?
NO! There is not a shield from personal liability.
41
Organized for charitable or benevolent purposes describes which type of corporation?
Nonprofit Corporations
42
For-profit corporations that set a goal to create a public benefit while providing economic returns to investors are known as?
Benefit Corporations
43
A state by virtue of its police power may create any kind of corporation for any purpose. This relates to?
The power to create
44
States have a __________ corporate code.
general
45
Under the laws of the United States, the power to regulate is given to corporations because?
The corporation is looked at as a natural being so there is "Protection of the Corporation as a Person"
46
"Protection of the Corporation as a citizen" relating to the power to regulate says
The protection of the corporation as a citizen is covered by to the state of incorporation and the state where it has a principal place of business
47
Corporations are given the particular power of perpetual life, what does that mean?
Perpetual life gives corporations the power to continue forever
48
What is required for corporate identification?
Corporate name
49
What is optional for corporate identification? (unless required by statute or natural person in the same business)
Corporate Seal
50
The written rules and regulations enacted by corporations to govern its affairs and shareholders, directors, and officers are known as
Bylaws
51
Other "particular powers" given to corporations mentioned in the text:
``` stock making contracts borrowing money executing negotiable instruments issuing bonds transferring property acquiring property paying employee benefits charitable contributions ```
52
Corporations are allowed to buy back their own stock, this stock is now called
treasury stock
53
Corporations are allowed to do business in another state but...
The corporation MUST satisfy valid restrictions of the foreign state in which it seeks to do business
54
Participating in an enterprise
Generally, corporations can participate in an enterprise to the same extent as any other individual
55
What is it called when a corporation acts beyond the scope of its powers?
Ultra Vires Acts (modern corporations have broad powers, so this is rare)
56
Can more than one person act as an incorporator?
Yes
57
What are the four components included in setting up an application for incorporation?
(1) Name (2) Number of shares of stock authorized to issue (3) Street address and name of the initial registered agent (4) Name and address of each incorporator
58
Who generally issues the certificate of incorporation?
The secretary of state
59
What is a de facto corporation?
It is a corporation who has substantial defect in filing that cannot be ignored. But there is enough compliance to recognize that there is a corporation in existence.
60
When does a corporation by estoppel come about?
Comes about when parties are estopped from denying that the corporation exists because they have dealt with it as if it was a corporation. The defect may be so great that no corporation exists.
61
When should a corporation go through bankruptcy and reorganization?
When a corporation is insolvent
62
The secretary of state may dissolve a corporation (Forfeiture of Charter) if a corporation does not?
- does not pay franchise fees - does not file an annual report - has no registered agent
63
When can a judicial dissolution be decreed?
If management is deadlocked and deadlock cannot be broken by shareholders
64
What laws describe the requirements for voluntary dissolution?
State laws describe the requirements
65
Two or more corporations cease to exist and a new corporation with assets of the old corporations comes into being
Consolidation
66
One corporation absorbs another. All assets are absorbed into the surviving corporation which is required to pay the fair value of stock to shareholder who objects.
Merger
67
Relationship between a parent company and a subsidiary engaged in activities unrelated to that of the parent
Conglomerate
68
Consolidations, mergers and asset acquisitions are prohibited by?
Federal anti-trust laws when the effect is to lessen competition
69
In mergers and consolidations, surviving corporation acquires?
All rights, debts, and property
70
If one corporation purchases another's assets, then the purchaser is not liable for the seller's obligations UNLESS?
The asset sale was done to avoid liability

Mgmt 429 (3 decks)

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