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Chapter Quiz
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1
A corporation with relatively few numbers of shareholders are known as close corporations.
A)True
B)False
2
Close corporations typically have their stock traded on a public stock exchange.
A)True
B)False
3
A corporation that is incorporated in State X, but does most of its business in State Y, may be deemed to be a "pseudo-foreign corporation" of State Y.
A)True
B)False
4
Non-profit corporations have officers and directors, but do not have shareholders.
A)True
B)False
5
Shareholders in an "S" corporation may not exceed a total of 75.
A)True
B)False
6
A corporation is an entity separate and apart from its owners and managers.
A)True
B)False
7
ABC Corporation files its incorporation papers in Delaware. However, its principal place of business is California and most of its business activity occurs in California. Such a corporation is known as a:
A)Close corporation.
B)"S" corporation.
C)Pseudo-foreign corporation.
D)Fiduciary corporation.
8
Foreign corporations may be subject to the jurisdiction of a state:
A)if the state has passed a long-arm statute.
B)if the corporation has certain "minimum contacts" with that state.
C)if the state decides that it wishes to force the corporation to defend a lawsuit in its state, regardless of "minimum contacts."
D)Both A and B
E)All of the above
9
Piercing the corporate veil:
A)is a relatively easy task to accomplish for a creditor of the corporations.
B)requires the creditor to prove that the shareholders dominated the corporation and that the domination was done for an improper purpose.
C)will occur if the corporation only has one shareholder.
D)is a common occurrence in American corporate law.
10
All of the following are examples of "improper use" of a corporation for purposes of piercing the corporate veil except:
A)using the corporation to defraud creditors.
B)using the corporation to evade an existing legal obligation to another.
C)using the corporation to avoid compliance with a statute.
D)using the corporation to pay personal expenses of an owner.





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