1) The following must be in a corporation's articles of incorporation (also known as the certificate of incorporation in New York State):

A) The name of the corporation.

B) The address of the initial registered office of the corporations and the name of its registered agent.

C) The name and address of each incorporator.

D) All of the above

2) If an entity is not properly incorporated, those who attempted to create the corporation are never personally liable on obligations incurred by the defective corporation. True or False?

3) Directors have a duty to act in good faith and with loyalty to the corporation, a loyalty that is undivided and which considers only the welfare of the corporation. True or False?

4) A for-profit corporation, under the MBCA,

A) must state in the articles of incorporation precisely what the corporation's purposes are.

B) doesn't have to file anything with the state in order to function.

C) does not have to include a statement of purpose in the articles of incorporation or could state that the corporation could engage in "any lawful activity," or some similar statement.

D) must make a profit every year of its existence.

5) The long arm jurisdiction of a court can be used to subject a foreign corporation to a lawsuit in that court even if the corporation has no office in the state in which the court is located, if the corporation has established some contact with the state, for example, through the making of a business contract in the state, and the exercise of the court's jurisdiction meets the "fair play and substantial justice" standard. True or false?

6) The legal existence of a corporation is unaffected by the death of all of its shareholders. True or false?

7) Some of the ways to maintain the "corporate formalities" and to defend an action seeking to pierce the "corporate veil" include

A) opening and using a separate corporate bank account.

B) insisting that contracts be taken in the name of the corporation.

C) maintaining minutes or records of shareholders' meetings and meetings of the Board of Directors.

D) All of the above

8) Which of the following are some of the requirements to have a de facto corporation?

A) Both B and C.

B) The promoters or managers of the entity make an honest attempt to organize under the statute and have substantially complied with the mandatory provisions of the statute taken as a whole.

C) There is a valid statute under which the corporation could be organized

D) Neither B or C

9) Tangible or intangible property or benefit to the corporation, including a contract for services to be performed for the corporation, are valid forms of consideration for the issuance of shares. True or false?

10) A domestic corporation

A) is incorporated in a different state from the state in which it is doing business.

B) is incorporated in the same state in which it is doing business.

C) is incorporated in a foreign country.

D) None of the above

11) If a corporation is a wholly owned subsidiary of another corporation and the parent corporation, which controls the board of directors of the subsidiary corporation, sells assets to its subsidiary at a price much higher than fair market value which causes the subsidiary to stop paying creditors, a court can pierce the subsidiary's corporate veil and hold the parent corporation liable to the creditors. True or false?

12) The traditional objective of the business corporation has been to enhance corporate profits and shareholder gain. True or false?

13) As a general rule, shareholders

A) have the right to manage the corporation.

B) have a right to manage the corporation in joint meetings with the board of directors.

C) have no right to manage the corporation.

D) can never serve as directors of the corporation whose shares they own.

14) Since shareholders own the corporation, if the Board of Directors votes to dissolve the corporation, the shareholders thereafter have the right to vote on whether the corporation is to be dissolved. If the Board and the shareholders vote to dissolve the corporation, a certificate or articles of dissolution must be filed with the Department of State in the state in which the corporation is incorporated to terminate the corporation's existence. True or False?

15) The business judgment rule protects managers of a corporation from liability if the managers

A) B, C and D are all incorrect answers.

B) investigate the transaction by relying on an interested third party's verbal representations.

C) agree to the transaction only because Joe, the party with whom the corporation is going to transact business, is a nice guy who lives in the town where the corporation's main office is located and is the brother of the chairman of the board of directors.

D) stand to receive personal profit from the transaction.

16) In order for a corporation to indemnify a director who loses a lawsuit, the corporation must determine that the director acted in good faith, and the director reasonably believed that he acted in his best interests. True or false?

17) A shareholder voting agreement

A) may be perpetual in duration.

B) may be kept secret from the other shareholders.

C) must be in writing to be enforceable in court.

D) All of the above

18) To declare a cash or property dividend, a corporation generally must meet the solvency test and the balance sheet test. True or false?

19) The Board of Directors can delegate some of its powers to committees of the Board, such as an executive committee, an audit committee and/or a compensation committee. True or false?