R6 M5

Question 1

Generally, which of the following must be contained in a corporation’s articles of incorporation?

I.Names of the initial officers and their terms of office.
II.The name of each incorporator.
III.Provision for the issuance of voting stock.

A.	I and II.
B.	II and III.
C.	II only.
D.	I, II, and III.

Answer 1

Choice “B” is correct. The articles must contain the name of the corporation, the name of its registered agent, the name of its incorporators and stock provisions (specifically including the amount of shares the corporation is authorized to issue and which stock has voting power). Thus, the names of all incorporators and a provision for the issuance of voting stock must by included. The names of the officers are not required.

Question 2

Answer 2

Choice “B” is correct. The articles must contain the name of the corporation, the name of its registered agent, the name of its incorporators and stock provisions (specifically including the amount of shares the corporation is authorized to issue and which stock has voting power). Thus, the names of all incorporators and a provision for the issuance of voting stock must by included. The names of the officers are not required.

Question 3

Directors are authorized to:

Answer 3

Declare dividend.

They cannot individually take decision that fundamentally changes the organization without the approval of the board.

Question 4

Which of the following must take place for a corporation to be voluntarily dissolved?

A.	Amendment of the certificate of incorporation.

B.	Unanimous vote of the stockholders.

C.	Approval by the officers of a resolution to dissolve.

D.	Passage by the board of directors of a resolution to dissolve.

Answer 4

Choice “D” is correct. For a corporation to dissolve, the directors must adopt a resolution recommending dissolution.

Choice “A” is incorrect. To dissolve, the certificate of incorporation need not be amended; rather, a certificate of dissolution must be executed and filed.

Choice “B” is incorrect. Generally, fundamental corporate changes such as dissolution need only be approved by a majority of the outstanding shares.

Choice “C” is incorrect. The officers are not required to approve resolutions for fundamental corporate changes. Approval is required from the board of directors and the stockholders.

Question 5

Chris exchanges his computer for an updated model. The seller of the original computer retained a security interest in the original computer for credit extended to Chris. The debt on the original computer has not been fully paid by Chris. If the seller perfected their interest in the original computer, what is the seller’s status with respect to the new computer?

A.	The seller’s interest is perfected for four months in the new computer.

B.	The seller’s perfection of the original computer transfers to the new computer.

C.	The seller’s interest is perfected for 20 days in the new computer.

D.	Once the new computer was purchased, the seller no longer has a security interest in the new computer.

Answer 5

Choice “C” is correct. A security interest is temporarily perfected in the new collateral for 20 days from the debtor’s receipt of the proceeds.

Choice “A” is incorrect. A four month grace period is allowed when the same collateral is moved from one state to another. The creditor would have to perfect in the new state.

Choices “D” and “B” are incorrect per the above explanation.