CHAPTER 27: LAWS OF THE CORPORATIONS

The major advantage of the corporation form over the partnership for is taxes.

• True

• False

Answer explanation

The major advantage of the corporation form over the partnership for taxes is False. Corporations often face higher tax rates compared to partnerships.

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The biggest disadvantage of a corporation jis transferring ownership interest in the firm.

• True

• False

Answer explanation

The correct choice is False because transferring ownership interest is not a disadvantage of a corporation.

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Corporations are classified according to their place of incorporation

and purpose.

• True

• False

Answer explanation

Corporations are indeed classified based on their place of incorporation and purpose. Therefore, the correct answer is True.

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Usually an application for incorporation must be filed with the Secretary of Sate of the state in which incorporation is sought.

• True

• False

Answer explanation

An application for incorporation must be filed with the Secretary of State of the state in which incorporation is sought. This statement is true.

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The promised dividend of cumulative prefered stock remains due and payable in the future, if it is not paid in a given year.

• True

• False

Answer explanation

The promised dividend of cumulative preferred stock remains due and payable in the future if it is not paid in a given year. This statement is true.

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A stockholder that owns most of all the stock can act for the corporation and bind it by contract.

• True

• False

Answer explanation

The correct choice is False. A stockholder that owns most of all the stock cannot act for the corporation and bind it by contract.

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Bankruptcy of a corporation does not in itself cause dissolution.

• True

• False

Answer explanation

Bankruptcy does not automatically lead to dissolution. True is the correct choice.

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A corporation may be granted the power of perpetual succession by the state of its incorporation.

• True

• False

Answer explanation

A corporation can be granted perpetual succession by the state of incorporation, allowing it to exist indefinitely. This is true.

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A corporation may do any legal act that is necessary or convenient for the execution of its express powers.

• True

• False

Answer explanation

A corporation has the authority to perform any legal act necessary or convenient for the execution of its express powers. In this case, the correct choice is True.

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Corporate officers may hold shares in the company the work for.

• True

• False

Answer explanation

Corporate officers can hold shares in the company they work for, which is true in this case.

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