Bule GMU Final Exam Study Guide QUESTIONS WITH 100% SCORED A+ SOLUTIONS
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Module
Bule GMU
Institution
Bule GMU
Audit committee of the board of directors - ️️Responsible for the selection,
compensation, and oversight of the independent public accountants that audit the firm's
financial records. The Sarbanes-Oxley act of 2002 requires all publically held
corporations to have an audit committee.
The or...
Bule GMU Final Exam Study Guide
Audit committee of the board of directors - ✔️✔️Responsible for the selection,
compensation, and oversight of the independent public accountants that audit the firm's
financial records. The Sarbanes-Oxley act of 2002 requires all publically held
corporations to have an audit committee.
The order or priority that is used when conflicts arise among documents invovling
corporations. - ✔️✔️1. The U.S. constitution
2. State constitutions
3. State Statutes
4. The articles of incorporation
5. Bylaws
6. Resolutions of the board of directors.
Requirements for S Corporation Status - ✔️✔️1. Must be a domestic corporation.
2. The corp. must not be a member of an affiliated group of corporations
3. The shareholders of the corp. must be individuals, estates, or certain trusts.
Partnerships and nonqualifying trusts cannot be shareholders. Corporations can be
shareholders under certain circumstances.
4. The corp. must have no more than 100 shareholders.
5. The corp. must only have one class of stock, although all shareholders do not have
the same voting rights.
6. No shareholder of the corporation may be a nonresident alien.
Model Business Corporation Act (MBCA) - ✔️✔️A codification of modern corporation
law that has influential in the drafting and revision of state corporation statutes.
RMBCA - ✔️✔️Revised model business corporation act.
Board of Directors - ✔️✔️Responsible for the overall management of the firm.
members are elected by the shareholders. They hire the corporate officers and other
employees to run the daily business operations, determines the capital structure of the
corporation, and declares dividends. Ultimate authority in any corporation. No individual
director can act as an agent to bind the corporation. The number of directors is stated in
the corporation's bylaws. Directors usually serve a term of a year. Directors can be
removed for "cause".
Corporate shareholders - ✔️✔️Own a piece of the corporation. They are not normally
personally liable for the obligations of the corportation beyond the extent of their own
investments.
,Dividend - ✔️✔️A distribution to corporate shareholders of corporate profits or income,
disbursed in proportion to the number of shares held. Double taxation is a part of
receiving these profits.
Retained Earnings - ✔️✔️The portion of a corporation's profits that has not been paid
out as dividends to shareholders.
Criminal acts and liability related to corporations - ✔️✔️A corporation may be held
liable for the criminal acts of it's agents and employees provided the punishment is one
that can be applied to the corporation.
Classification of corporations - ✔️✔️Can be based on its location, purpose, and
ownership characteristics.
Domestic Corporation - ✔️✔️In a given state, a corporation that does business in, and
is organized under the law of, that state.
Foreign Corporation - ✔️✔️In a given state, a corporation that does business in the
state without being incorporated therein.
Alien Corporation - ✔️✔️A designation in the United States for a corporation formed in
another country but doing business in the United States.
Certificate of Authority - ✔️✔️A corporation doesn't have an automatic right to do
business in another state, so in some instances they must get a certificate of authority.
Public Corporation - ✔️✔️Formed by the government to meet some political or
governmental purpose. (EX: postal service) Same as a public held corporation whose
shares are publicly traded in securities markets, such as the new york stock exchange.
Private Corporation - ✔️✔️Created wholly or in part for private benefit.
Nonprofit Corporation - ✔️✔️Corporations formed for another purpose than making
profits. Example: Private hospitals, educational institutions.
Corporation - ✔️✔️A legal entity formed in compliance with statutory requirements that
is distinct from it's shareholder-owners. It can be owned by a single person or millions of
shareholders. Recognized as a 'person' and enjoys many of the same rights and
privileges under state and federal law that people do.
Close Corporation - ✔️✔️A corporation whose shareholders are limited to a small
group of persons, often only family members. IN this type of corporation, a
shareholder's rights to transfer shares to others are often restricted.
, S Corporation - ✔️✔️A close business corporation that has most corporate attributes,
including limited liability, but qualifies under the Internal Revenue Code to be taxed as a
partnership.
Professional Corporations - ✔️✔️Professionals such as physicians, lawyers, dentists,
and accountants can be this type of corporation.
Benefit Corporation - ✔️✔️A for-profit corporation that seeks to have a material positive
impact on society and the environment. This new business form is available by statute
in a growing number of states.
Ways in which benefit corporations differ from traditional corporations: - ✔️✔️1.
Purpose-- Purpose is to benefit society and the environment as a whole and this is
taken heavily into consideration when making decisions.
2. Accountability-- Shareholders of a benefit corp. determine whether the company has
achieved a material positive impact. Shareholders have a right of private action called a
benefit enforcement proceeding, enabling them to sue the corp. if it fails to pursue of
create public benefit.
3. Transparency-- A benefit corp. must issue an annual benefit report on its overall
social and environmental performance that uses a recognized third party standard to
assess it's performance. The report must be delivered to the shareholders and posted
on a public website.
Basic steps of incorporation procedures - ✔️✔️1. Select a state of incorporation.
2. Secure the corporate name by confirming it's availability.
3. Prepare the articles or incorporation.
4. File the articles of incorporation with the secretary of state and pay the specified fees.
Articles of Incorporation - ✔️✔️The document containing basic information about the
corporation that is filed with the appropriate governmental agency, usually the secretary
of state, when a business is incorporated.
Articles of Incorporation must include the following articles: - ✔️✔️1. The name of the
corporation.
2. The number of shares the corporation is authorized to issue.
3. The name and address of the corporation's initial registered agent (the person
designated to receive legal documents on behalf of the corp.)
4. The name and address of each incorporator.
Bylaws - ✔️✔️The internal rules of management adopted by a corporation or other
association.
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