Understanding Business and Personal Law
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Chapter 28: Forming and Financing a Corporation
      
  1.A corporation is considered foreign if it  
  a.   operates as a private organization using public funds.  
  b.   is incorporated in another country but does business in this country.  
  c.   does business outside the state in which it was incorporated.  
  d.   does business overseas.  
      
  2.Holders of common stock are the first shareholders to be paid dividends.  
  a.   TRUE  
  b.   FALSE  
      
  3.If an error is inadvertently made while filing the articles of incorporation, the law says that the corporation exists in fact (de facto).  
  a.   TRUE  
  b.   FALSE  
      
  4.School districts are examples of public corporations.  
  a.   TRUE  
  b.   FALSE  
      
  5.Each shareholder has one vote for each share of stock that he or she owns.  
  a.   TRUE  
  b.   FALSE  
      
  6.A corporation is a(n)  
  a.   organization that is exempt from government regulations.  
  b.   large organization with more than 50 employees.  
  c.   body formed and authorized by law to act as a single person.  
  d.   partnership that has filed special papers.  
      
  7.All corporations issue  
  a.   dividends.  
  b.   common stock.  
  c.   bonds.  
  d.   preferred stock.  
      
  8.A limited liability company (LLC)  
  a.   calls the people who run the LLC members.  
  b.   allow the owners to have limited liability and double taxation.  
  c.   combines the best features of a sole proprietorship and a corporation.  
  d.   combines the best features of a partnership and a corporation.  
      
  9.The articles of incorporation  
  a.   describes a corporation's organization, powers and authority.  
  b.   are only required for public corporations.  
  c.   allow a corporation to choose a name without the words "corporation, incorporated, or company."  
  d.   are bylaws under which the corporation operates.  
      
  10.An article of incorporation is a corporation's official authorization to do business in the state.  
  a.   TRUE  
  b.   FALSE  

 
 
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