Name: Score:
272 Multiple choice questions
Term 1 of 272
Which of the following is not required for a foreign corporation to get a certificate of authority to
do business?
Submit a business plan
File a copy of its bylaws with the secretary of state
Provide a list of shareholders
Pay a registration fee
Term 2 of 272
The document that the state issues evidencing that a corporation has been duly formed is the
corporation's ___
Operating Agreement
Certificate Of Incorporation
Charter
Bylaws
Term 3 of 272
Some states use the alter ego theory to require corporations to assume liability for contracts
negotiated on their behalf by the promotors
T/F
True
False
,Term 4 of 272
A corporation must qualify to do business in each state where it conducts business activities
T/F
True
False
Term 5 of 272
Jim and Fred had been equal partners in J and F industries for 20 years. Jim has died and Fred is
now in the process of winding up the partnership. Which of the following statements about the
winding up process is false?
Fred can unilaterally decide the distribution of assets
Jim's estate is entitled to participate in the winding up process
Jim's estate must pay off all debts before winding up
The partnership must continue operating until a new partner is found
Term 6 of 272
Courts will allow creditors to pierce the corporate veil of any corporation that has only one
shareholder
T/F
True
False
Term 7 of 272
Directors must be compensated for their services
T/F
True
False
,Term 8 of 272
Why are corporations said to have a burden of "double tax"?
Corporations are exempt from paying taxes on any profits
Profits are taxed only when they are reinvested in the company
Profits are taxed at the corporate level as income and again at the shareholder level as
dividends
Profits are only taxed at the shareholder level as personal income
Term 9 of 272
A limited partnership must have at least one general partner and one limited partner
T/F
True
False
Term 10 of 272
Stock that a corporation buys back from its shareholders is treasury. Most state corporation
statutes require that the money to repurchase shares come from ...
A special stock subscription
Accumulated profits or surplus
A new issue of debt instruments
Marshaling of assets
, Term 11 of 272
Partners hold title to partnership property as...
Tenants in partnerships
Consolidation
Admitting a new partner into the partnership
Notice of lien
Term 12 of 272
The provisions of the law AND the partnership agreement govern the operations of the
partnership
T/F
True
False
Term 13 of 272
A director's duty of care is that of a normally prudent businessperson in the management of his or
her own affairs
T/F
True
False
Term 14 of 272
A partner who participates in the management of the partnership, but whose existence is not
known to the public is a ___ partner
Visible
Active
Public
Secret
272 Multiple choice questions
Term 1 of 272
Which of the following is not required for a foreign corporation to get a certificate of authority to
do business?
Submit a business plan
File a copy of its bylaws with the secretary of state
Provide a list of shareholders
Pay a registration fee
Term 2 of 272
The document that the state issues evidencing that a corporation has been duly formed is the
corporation's ___
Operating Agreement
Certificate Of Incorporation
Charter
Bylaws
Term 3 of 272
Some states use the alter ego theory to require corporations to assume liability for contracts
negotiated on their behalf by the promotors
T/F
True
False
,Term 4 of 272
A corporation must qualify to do business in each state where it conducts business activities
T/F
True
False
Term 5 of 272
Jim and Fred had been equal partners in J and F industries for 20 years. Jim has died and Fred is
now in the process of winding up the partnership. Which of the following statements about the
winding up process is false?
Fred can unilaterally decide the distribution of assets
Jim's estate is entitled to participate in the winding up process
Jim's estate must pay off all debts before winding up
The partnership must continue operating until a new partner is found
Term 6 of 272
Courts will allow creditors to pierce the corporate veil of any corporation that has only one
shareholder
T/F
True
False
Term 7 of 272
Directors must be compensated for their services
T/F
True
False
,Term 8 of 272
Why are corporations said to have a burden of "double tax"?
Corporations are exempt from paying taxes on any profits
Profits are taxed only when they are reinvested in the company
Profits are taxed at the corporate level as income and again at the shareholder level as
dividends
Profits are only taxed at the shareholder level as personal income
Term 9 of 272
A limited partnership must have at least one general partner and one limited partner
T/F
True
False
Term 10 of 272
Stock that a corporation buys back from its shareholders is treasury. Most state corporation
statutes require that the money to repurchase shares come from ...
A special stock subscription
Accumulated profits or surplus
A new issue of debt instruments
Marshaling of assets
, Term 11 of 272
Partners hold title to partnership property as...
Tenants in partnerships
Consolidation
Admitting a new partner into the partnership
Notice of lien
Term 12 of 272
The provisions of the law AND the partnership agreement govern the operations of the
partnership
T/F
True
False
Term 13 of 272
A director's duty of care is that of a normally prudent businessperson in the management of his or
her own affairs
T/F
True
False
Term 14 of 272
A partner who participates in the management of the partnership, but whose existence is not
known to the public is a ___ partner
Visible
Active
Public
Secret
