22 Questions
Which of the following accurately describes a corporation?
A corporation is a legal entity created according to statutory requirements
What is the function of state corporation statutes?
To regulate the formation, operation, and dissolution of corporations
Which of the following is a power that corporations have?
The power to sue or be sued in their own names
True or false: A corporation can only be started with multiple people?
False
True or false: Courts do not play a role in resolving corporate and shareholder disputes?
False
A corporation is a ______ legal entity, that is created according to statutory requirements.
fictitious
Courts interpret state corporation statutes to decide individual corporate and shareholder ______.
disputes
Which of the following is NOT a favorable characteristic of corporations?
Unrestricted management
What is the role of the board of directors in a corporation?
Make policy decisions concerning the operation of the corporation
Under what circumstances can a shareholder be held personally liable for the debts of a corporation?
When the shareholder is also a corporate officer
True or false: Shareholders are personally liable for the contracts and debts of their corporation.
False
True or false: Corporate shares are not freely transferable by the shareholder.
False
True or false: There is a general federal corporations law governing the formation and operation of private corporations.
False
With limited liability of shareholders, shareholders are only liable to the extent of their capital contributions for the contracts and debts of their corporation. Shareholders are not personally liable for the contracts and debts of the corporation. Even a sole shareholder won’t be held personally ______.
liable
Corporations exist in perpetuity, unless specific duration is stated in articles of incorporation. Corporations can be voluntarily terminated by the shareholders or involuntarily terminated by the corporation’s ______.
creditors
In a corporation, the board of directors makes policy decisions concerning the operation of the corporation. Members of the board of directors are elected by the shareholders. Directors appoint corporate officers to run the corporation’s ______ operations.
day-to-day
Which of the following is NOT a characteristic of corporations?
Decentralized management
What is the role of the board of directors in a corporation?
They make policy decisions concerning the operation of the corporation
Which of the following is a characteristic of a closely held corporation?
Shareholders are often involved in management
What is the main difference between a publicly held corporation and a closely held corporation?
Number of shareholders
What is a possible disadvantage of being a shareholder in a closely held corporation?
Difficulty in buying and selling shares
What is a possible advantage of being a shareholder in a closely held corporation?
Greater involvement in management
Take this quiz to test your knowledge on corporations! Learn about the legal requirements for starting a corporation, the role of Corporation Codes, and how courts interpret state statutes to resolve disputes. This quiz will help you understand the concept of a corporation as a separate legal entity. Keywords: corporation, legal entity, statutory requirements, Corporation Codes, shareholder disputes, separate legal entity.
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