Hypothetical Question with Sample Answer Jolson is the chair of the board of directors of Artel, Inc., and Douglas is the chair of the board of directors of Fox Express, Inc. Artel is a manufacturing corporation, and Fox Express is a transportation corporation. Jolson and Douglas meet to consider the possibility of combining their corporations and activities into a single corporate entity. They consider two alternative courses of action: Artel could acquire all of the stock and assets of Fox Express, or the corporations could combine to form a new corporation, called A&F Enterprises, Inc. Both Jolson and Douglas are concerned about the necessity of a formal transfer of property, liability for existing debts, and the need to amend the articles of incorporation. Discuss what the two proposed combinations are called and the legal effect each has on the transfer of property, the liabilities of the combined corporations, and the need to amend the articles of incorporation.

—For a sample answer to Question 29–2, go to Appendix E at the end of this text.