TEST BANK for Business Law with UCC Applications, 15th Edition Paul Sukys. All Chapters 1-34.

Business Law with UCC Applications, 15e (Sukys) Chapter 26 The Corporate Entity 1) In the new Classic Case, Burwell v. Hobby Lobby, the Supreme Court concludes that the term person in the statute is meant to protect corporate "persons" only because the real protection flows to the people behind that corporate veil.

2) The entire corporate, capitalist state is based on the faith and trust that investors have no liability for their investments.

3) The Fourteenth Amendment grants due process rights to corporate shareholders and stakeholders only.

4) Limited liability means that shareholders can be held personally liable for the debts of the corporation, but will not lose their capital investment.

5) A corporation is a domestic corporation in the state where its principal office is located, but it is an alien corporation in all other states.

6) An electric company would be an example of a S-Corporation.

7) Dividends are the net profits, or surplus, set aside for the shareholders.

8) Outstanding shares of stock of the Cattleman Corp. are held by seven shareholders, four from the Tate family, and 3 from the Anchustegui family. The Cattleman Corp. cannot be designated a close corporation because the shareholders are not from the same family.

9) A limited liability company is a business arrangement that permits an individual to lease the right to use a parent entity's business operation, intellectual property, goods, and services under a fee arrangement provided to the parent.

10) If only a minor requirement of incorporation has been left unsatisfied, the court will allow any shareholder to directly sue and challenge the de facto corporation's existence.

11) Janet is the promoter of a corporation called Time Inc., which is in the process of being formed. Janet rents office space in Time's name which is a de jure corporation. Time is bound by Janet's contract.

12) Undercapitalization will be considered convincing evidence that the corporate owners intended to use the corporate façade to escape liability.

13) The main issue in the William Stewart v. R. A. Eberts, Company, Inc. case, detailed in A New Classic Case, was whether the corporate veil should be pierced and hold the shareholders owners liable for ignoring the terms of a contract that had been made several years earlier.

14) The issuing and selling of shares of stock to raise capital is known as debt financing.

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