Reference no: EM132313590

1. A group of entrepreneurs wish to start a business and they decide to incorporate the business pursuant to the laws of the State of Florida. In Florida, this corporation will be referred to as:

a. An original corporation

b. A traditional corporation

c. An interest corporation

d. A domestic corporation

2. Vitro S.A. is the largest manufacturer of glass containers in Mexico. It is formed under the law of the United Mexican State, a deferral republic in North America. Vitro S.A. has registered to do business in several states in the United States, including the State of Florida. For purpose of classification within the State of Florida, Vitro S.A. would be classified as:

a. A foreign domestic corporation

b. An alien corporation

c. A legitimate corporation

d. None of these choices

3. Sam, Fred, and Joe do business as Fertile Valley farm with the intentions of making a profit. Sam, while driving a truck making deliveries for the business, runs down grandma in the cross walk. Grandma sees Fertility Valley Farms for her injuries. Fertile Valley Farm's assets are not sufficient to satisfy the judgment that grandma has obtained against the firm. Grandma can seek to satisfy the balance of her judgment from the personal assets of Sam, Fred and Joe under the doctrine of:

a. Join and several liability

b. Respondeat superior

c. Implied negligence

d. None of these choices

4. The United States Internal Revenue Service has issued regulations that allows an existing corporation to apply for a certain type of tax treatment. This type of corporation is commonly referred to as a Subchapter S corporation or an S Crop, in reference to the section of the IRS regulation governing this matter. The type of tac treatment afforded to a Subchapter C corporation is:

a. The corporation is entitled to a tax credit equal to the number of stockholders in the form multiplied by $100.

b. The corporation may elect to be taxed like a partnership

c. The corporation may elect to be taxed like a public corporation

d. None of these choices

5. A direct and an offer of a corporation are often called upon to make decisions effecting the business that may or may not have a positive result on the business. The law has developed a test to be applied to make these decisions which will protect directors and officers from honest mistakes in judgment or what turns out to be a bad decision. This test is known as:

a. A Business Results Rule

b. The Business Judgment Rule

c. The Good Judgment Rule

d. The Director of the Officer Fairness Rule

6. Acme Corporation has been in business for fifty (50) years. Over the course of its corporate existence, Acme has issues two distinct types of equity securities. While the holders of both types of equity securities gives the owner a right to an annual guaranteed dividend. (A dividend is a device whereby the corporation can distribute some or all its profits to its owners.) This type of equity security is most likely referred to as:

a. Common Stock

b. A corporate bond

c. Preferred stock

d. None of these choices