All of the following are ways in what one becomes a shareholder except buying shares initially issued by a corporation during its incorporation receiving a gift of shares that have already been issued to another shareholder buying shares issued by a corporation subsequent to its incorporation purchasing shares that have already been issued to another shareholder purchasing debentures issued by the corporation what of the following statements is typically true of distributing corporations They can have any number of directors They limit shareholders to less than ten individuals They have no governmental limits on their actions They cannot provide access to corporate records to the shareholders They cannot restrict the transfer of shares Randall is the director of a corporation that is dissolving The remaining shareholders are Paul and Nina The sole remaining asset of the corporation is $500 cash The corporation owes Martin $100 for supplies he provided Paul and Nina petition Randall to distribute the remaining funds to them because Martin has not yet renewed his request for payment Can Randall distribute the money to Paul and Nina No, because Martin is entitled to have the debt repaid before Paul and Nina benefit Maybe, but only if their combined investment was more than $500 Yes, because a creditor has no right to repayment from a dissolving corporation No, because shareholders are not entitled to any payment from the dissolution of a business Yes, because a shareholder's right to liquidation is superior to the right of any creditor what of the following could not begin a corporation's dissolution The court for unfair treatment of a minority shareholder A creditor the corporation cannot pay The managing director The shareholders The employees Lifting the corporate veil is only permissible if the shareholders have executed a personal guarantee dealing with the debts of the corporation negates the limited liability advantage of incorporation is not based on the fairness of an outcome is frequently done when the corporation's assets are insufficient to discharge the corporation's obligations to creditors is only permissible if the corporation's incorporation documents allow the remedy what of the following is false with regard to a closely held corporation When a large corporation creates a subsidiary, it usually does so by incorporating a closely held corporation Closely held corporations have been permitted the luxury of operating in an atmosphere of relative privacy In a closely held corporation, decisions are typically made by a large group of shareholders The main use of closely held corporations is to incorporate small and medium sized enterprises where the number of participants is small The vast majority of corporations are closely held what one of the following statements is false about termination of a corporation When all of a corporation's assets are sold and all of the secured and preferred creditors have been paid, the purchasers of the assets remain bound by the contractual obligations of the corporation A corporation dissolved for failure to file an annual return may be revived A corporation may be dissolved involuntarily If the shares of a corporation are sold, then the corporation continues in existence and existing contracts continue to bind the corporation When a corporation is wound up, the creditors must be satisfied before the shareholders receive any of the corporation's assets Why is incorporation the most expensive way to operate a business There are incorporation costs, higher operation costs, recordkeeping costs, higher salaries, and more governmental regulation There are costs to incorporate and recordkeeping expenses Keeping all the shareholders informed about the business and happy with its progress is costly There are incorporation costs, higher operation costs, recordkeeping costs, and more governmental regulation Paying the directors and officers of a corporation increases the expense of running the corporation What are the general methods of incorporation available in Canada Registration and filing articles of incorporation Being granted letters of patent and filing articles of incorporation Registration, being granted articles of incorporation, and filing letters of patent Registration Registration, being granted letters of patent, and filing articles of incorporation Do all corporations have the same capacity to contract as a natural person No Corporations created by registration have limited capacity to contract Yes Corporations are always treated the same as a natural person Yes Even corporations created by statute can act the same as other types of corporations No Corporations are not people and so do not have the same capacity No A corporation created by a special act of the legislature or Parliament can have a limited area it can operate in What are the main differences between shareholders and bondholders of a corporation A shareholder is a voting participant in the corporation without the right to demand payment while a bondholder is a creditor without voting rights A shareholder helps manage the corporation while a bondholder approves the shareholder's decisions A shareholder, as a creditor, has the right to demand repayment while the bondholder, an investor, does not A shareholder has a right to an annual dividend while a bondholder has the right to repayment on set terms A shareholder has the right to repayment but no voting rights while a bondholder is a voting participant in the corporation Before a company can sell shares, it must have a prospectus which discloses the important information The person who participates in the initial set up of the corporation and creation of this prospectus is the promoter corporation prospectus maker CEO of the corporation lawyer for the corporation what of following is not a record that must be available to shareholders of a corporation The articles of incorporation A list of all the people who hold debentures The minutes of the last five shareholders' meetings The actual accounting books A list of all corporate officers A corporation has declared both preferred and common dividends the past two years The preferred stock has a promised annual dividend of one dollar per share This year the corporation does not declare a dividend Which of the following responses is valid The preferred shareholders sue for their promised dividend The shareholders vote out the board of directors The shareholders sue demanding the court uphold their right to the declaration of an annual dividend The shareholders sue for oppression because there was an expectation of income The shareholders sue to force payment of the dividend what of the following is not true about corporation dissolution The board of directors can voluntarily dissolve a corporation Winding up is required for small corporations The dissolution process can be started by a court order Dissolution can be involuntary The dissolution process can be completed through the winding up process set forth in statutes What is a common way that a corporation can be dissolved with minimal effort Following the winding up procedure Publishing a notice of dissolution Failure to file annual returns Failure to pay debts leading to bankruptcy No longer transacting any business What is the difference between selling the shares and selling the assets to end a business There is no difference Both result in corporate dissolution Selling the shares results in the corporation having no business while selling the assets results in new ownership of the corporation Selling the shares changes the ownership of the corporation while selling the assets does nothing to its business When selling the shares, the corporation still exists and is bound by its contracts while when selling the assets, the purchaser is only bound by liens on those assets When selling shares, the corporation ceases to exist and the purchaser is only bound by liens on the assets while when selling the assets, the purchaser is bound by the corporation's contracts

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All of the following are ways in what one becomes a shareholder except buying shares initially issued by a corporation during its incorporation. receiving a

All of the following are ways in what one becomes a shareholder except

buying shares initially issued by a corporation during its incorporation.

receiving a gift of shares that have already been issued to another shareholder.

buying shares issued by a corporation subsequent to its incorporation.

purchasing shares that have already been issued to another shareholder.

purchasing debentures issued by the corporation.

what of the following statements is typically true of distributing corporations?

They can have any number of directors.

They limit shareholders to less than ten individuals.

They have no governmental limits on their actions.

They cannot provide access to corporate records to the shareholders.

They cannot restrict the transfer of shares.

Randall is the director of a corporation that is dissolving. The remaining shareholders are Paul and Nina. The sole remaining asset of the corporation is $500 cash. The corporation owes Martin $100 for supplies he provided. Paul and Nina petition Randall to distribute the remaining funds to them because Martin has not yet renewed his request for payment. Can Randall distribute the money to Paul and Nina?

No, because Martin is entitled to have the debt repaid before Paul and Nina benefit

Maybe, but only if their combined investment was more than $500

Yes, because a creditor has no right to repayment from a dissolving corporation

No, because shareholders are not entitled to any payment from the dissolution of a business

Yes, because a shareholder's right to liquidation is superior to the right of any creditor

what of the following could not begin a corporation's dissolution?

The court for unfair treatment of a minority shareholder

A creditor the corporation cannot pay

The managing director

The shareholders

The employees

Lifting the corporate veil

is only permissible if the shareholders have executed a personal guarantee dealing with the debts of the corporation.

negates the limited liability advantage of incorporation.

is not based on the fairness of an outcome.

is frequently done when the corporation's assets are insufficient to discharge the corporation's obligations to creditors.

is only permissible if the corporation's incorporation documents allow the remedy.

what of the following is false with regard to a closely held corporation?

When a large corporation creates a subsidiary, it usually does so by incorporating a closely held corporation.

Closely held corporations have been permitted the luxury of operating in an atmosphere of relative privacy.

In a closely held corporation, decisions are typically made by a large group of shareholders.

The main use of closely held corporations is to incorporate small- and medium-sized enterprises where the number of participants is small.

The vast majority of corporations are closely held.

what one of the following statements is false about termination of a corporation?

When all of a corporation's assets are sold and all of the secured and preferred creditors have been paid, the purchasers of the assets remain bound by the contractual obligations of the corporation.

A corporation dissolved for failure to file an annual return may be revived.

A corporation may be dissolved involuntarily.

If the shares of a corporation are sold, then the corporation continues in existence and existing contracts continue to bind the corporation.

When a corporation is wound up, the creditors must be satisfied before the shareholders receive any of the corporation's assets.

Why is incorporation the most expensive way to operate a business?

There are incorporation costs, higher operation costs, recordkeeping costs, higher salaries, and more governmental regulation.

There are costs to incorporate and recordkeeping expenses.

Keeping all the shareholders informed about the business and happy with its progress is costly.

There are incorporation costs, higher operation costs, recordkeeping costs, and more governmental regulation.

Paying the directors and officers of a corporation increases the expense of running the corporation.

What are the general methods of incorporation available in Canada?

Registration and filing articles of incorporation

Being granted letters of patent and filing articles of incorporation

Registration, being granted articles of incorporation, and filing letters of patent

Registration

Registration, being granted letters of patent, and filing articles of incorporation

Do all corporations have the same capacity to contract as a natural person?

No. Corporations created by registration have limited capacity to contract.

Yes. Corporations are always treated the same as a natural person.

Yes. Even corporations created by statute can act the same as other types of corporations.

No. Corporations are not people and so do not have the same capacity.

No. A corporation created by a special act of the legislature or Parliament can have a limited area it can operate in.

What are the main differences between shareholders and bondholders of a corporation?

A shareholder is a voting participant in the corporation without the right to demand payment while a bondholder is a creditor without voting rights.

A shareholder helps manage the corporation while a bondholder approves the shareholder's decisions.

A shareholder, as a creditor, has the right to demand repayment while the bondholder, an investor, does not.

A shareholder has a right to an annual dividend while a bondholder has the right to repayment on set terms.

A shareholder has the right to repayment but no voting rights while a bondholder is a voting participant in the corporation.

Before a company can sell shares, it must have a prospectus which discloses the important information. The person who participates in the initial set-up of the corporation and creation of this prospectus is the

promoter.

corporation.

prospectus maker.

CEO of the corporation.

lawyer for the corporation.

what of following is not a record that must be available to shareholders of a corporation?

The articles of incorporation

A list of all the people who hold debentures

The minutes of the last five shareholders' meetings

The actual accounting books

A list of all corporate officers

A corporation has declared both preferred and common dividends the past two years. The preferred stock has a promised annual dividend of one dollar per share. This year the corporation does not declare a dividend. Which of the following responses is valid?

The preferred shareholders sue for their promised dividend.

The shareholders vote out the board of directors.

The shareholders sue demanding the court uphold their right to the declaration of an annual dividend.

The shareholders sue for oppression because there was an expectation of income.

The shareholders sue to force payment of the dividend.

what of the following is not true about corporation dissolution?

The board of directors can voluntarily dissolve a corporation.

Winding-up is required for small corporations.

The dissolution process can be started by a court order.

Dissolution can be involuntary.

The dissolution process can be completed through the winding-up process set forth in statutes.

What is a common way that a corporation can be dissolved with minimal effort?

Following the winding-up procedure

Publishing a notice of dissolution

Failure to file annual returns

Failure to pay debts leading to bankruptcy

No longer transacting any business

What is the difference between selling the shares and selling the assets to end a business?

There is no difference. Both result in corporate dissolution.

Selling the shares results in the corporation having no business while selling the assets results in new ownership of the corporation.

Selling the shares changes the ownership of the corporation while selling the assets does nothing to its business.

When selling the shares, the corporation still exists and is bound by its contracts while when selling the assets, the purchaser is only bound by liens on those assets.

When selling shares, the corporation ceases to exist and the purchaser is only bound by liens on the assets while when selling the assets, the purchaser is bound by the corporation's contracts.