BUL 5810 – CORPORATIONS EXAM with Questions and 100% Correct Answers
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Course
BUL 5810
Institution
BUL 5810
Wyatt, the sole stockholder of International Travel Corporation, wrongfully used the
corporation to avoid a personal liability. A court's disregarding the corporate entity and
holding Wyatt personally liable is called: - Answer piercing the corporate veil
Claire opened Claire's Beauty Parlor in ...
BUL 5810 – CORPORATIONS EXAM with
Questions and 100% Correct Answers
Wyatt, the sole stockholder of International Travel Corporation, wrongfully used the
corporation to avoid a personal liability. A court's disregarding the corporate entity and
holding Wyatt personally liable is called: - Answer piercing the corporate veil
Claire opened Claire's Beauty Parlor in her home. She solicited funds to begin the
business from Jack, who believed that the business was incorporated. Claire had, in fact,
never filed the papers. One day, Claire fell asleep while giving a customer a permanent
and the solution caused her customer severe burns. The customer sued the Beauty
Parlor for $500,000, an amount enormously in excess of the business assets. Under the
Revised Act, what would be the result? - Answer Jack would not be personally liable, but
Claire would
The president of Hi-Glow Cosmetics sends his top chemist to Hi-Glow's competitor's labs
to steal its formula for shiny lipstick. The chemist gets caught and is sent to jail. Can Hi-
Glow be found to be criminally liable? - Answer Yes, since the president authorized the
crime
Deer Haven, Inc. is a corporation incorporated in Arkansas and has its principal office in
San Antonio, Texas. Which of the following is true of Deer Haven, Inc.'s citizenship
status? - Answer Deer Haven, Inc. is a citizen of Arkansas and Texas, for the purpose of
determining diversity of citizenship
Carlos is a promoter of Debonair Enterprises, Inc. To whom, if any, does Carlos owe a
fiduciary duty? - Answer Carlos owes a fiduciary duty to any other promoters of
Debonair Enterprises.
, Robert approaches you and seeks to form a corporation. He asks you which document
should he create to govern the corporation. What do you tell him? - Answer Create
Articles of Incorporation
Shareholders of Tridential, Inc. are worried that the court will "pierce" its corporate veil
and hold the shareholders liable. Which of the following factors will a court consider in
deciding whether to pierce Tridential, Inc.'s corporate veil?
a. Tridential, Inc. did not follow the formalities of corporate procedures.
b. Tridential, Inc. did not provide an adequate financial basis for the business.
c. Tridential, Inc. did used the corporation to defraud others. - Answer ALL OF THESE
ARE CORRECT
Michael is truck driver employed by Simmons Construction Corporation. While
operating the truck during business hours, Michael negligently crashes into Peter. Is
Simmons Construction Corporation liable? - Answer Yes, Simmons Construction
Corporation is liable under the doctrine of respondeat superior
Barbara, a self-made millionaire, wants to start a corporation exclusively for charitable
and educational purposes. What type of corporation should Barbara form? - Answer
Non-profit corporation
In the case of Harold Lang Jewelers, Inc. v. Johnson, the court found that: - Answer
Lang's business was regular, continuous and substantial such that it was transacting
business in North Carolina
In the case of Coopers & Lybrand v. Fox, the court held: - Answer a promoter is
personally liable for the contracts he makes
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