32 - Corporations (not mine)

Question 1

-A separate legal entity that provides the shareholder with protection
-Limited liability
-Must be filed with the state
-Could be difficult to get a loan and owners may have to be personally liable

Answer 1

Corporation

Question 2

What are the levels of corporation taxation

Answer 2

Subchapter C: C-corp (owners are taxed separately from the entity)
Subchapter S: S-corp (corps elect to pass taxation, losses, deductions onto the shareholders) S for Special taxing

Question 3

What must a corporation have in order to be a corporation?

Answer 3

1. Charter
2. Promoter
3. Articles of incorporation
4. Stock holding authority
5. Time (how long it will exist)
6. Stock
7. Capital (how much you are investing)
8. Annual stock holder meetings
9. Board of directors
10. Officers
11. A name with a corporate indicator (Corp, Inc, LTD)
12. Stock

Question 4

Document stating that the corporation is formed.

Answer 4

Charter
1. Domestic - same state as the charter
2. Foreign - different state as the charter
3. Alien - different country as the charter

Question 5

A person who begins the corporation, has the idea, puts the work into forming it

Answer 5

Promoter

Question 6

What must be included in the Articles of incorporation?

Answer 6

-Name
-Purpose
-Authority
-Time of existence
-Stock/ capital

Question 7

What statute controls the corporation

Answer 7

Stockholding authority

Question 8

What is stock?

Answer 8

Proof of ownership

Question 9

Number of people necessary to call a meeting

Answer 9

Quorum

Question 10

Someone who sits in and votes on your behalf
-Can be establishes for 6mo

Answer 10

Proxy

Question 11

What are the board of directors and what can they do?

Answer 11

They are people elected by the stockholders to carry out the business.
1. They can make large purchase decisions
2. They establish the by-laws
3. Elect officers who perform what the board tells them to

Question 12

The regulations of a corporation.
-Contain the basic rules for the conduct of the corporation’s business and affairs

Answer 12

Bylaws

Question 13

What are the different classifications of stock?

Answer 13

1. Capital - retained earnings
2. Common - all stockholders must have common stock; issued and outstanding (not sold)
3. Preferred - held in higher regard than common stock, Has benefits over common
   -Guaranteed dividends, votes

Question 14

A stock that has been re-acquired after issuance

Answer 14

Treasury stock

Question 15

When stock is issued and they pay at least that amount
-An indicatory of what a stock might be worth

Answer 15

Par value

Question 16

How is a corporation dissolved?

Answer 16

1. Typically requires supermajority (60/40) of shareholder vote
2. Reason
3. Manner

Question 17

What are some reasons that the shareholders may decide to dissolve a corp?

Answer 17

1. Decision by the board
2. Fraudulent activity (government decided)
3. Tax liability (government decided)
4. Bankruptcy

Question 18

What are the manners by which a corporation can be dissolved?

Answer 18

1. Marshall of assets: liquidation (sold to generate money)
2. Secured claim personal interest in asset
   i. Ex. bank’s interest in mortgage that has not been paid
   ii. Lein - can only be granted by judgement or at time of loan
   iii. Creditors get paid
   iiii. Stockholders (preferred first and then common)