Question

19) Boris, a sole proprietor, manufactures glass containers for beverages. Boris wants to convert his business to a corporation. Just before he completes the paperwork to incorporate, Boris renews the lease on his factory. Which of the following is true?

Select one:

a.
The lease contract is breached as soon as Boris’ business is incorporated.

b.
The new corporation is instantly liable on the lease as soon as it is incorporated.

c.
Boris remains personally liable on the lease unless the corporation adopts it through a novation.

d.
No one is liable: Boris’ sole proprietorship no longer exists and the corporation did not sign the lease.

20) A provision in the bylaws of Wells Fergo Corporation allows each shareholder to maintain his proportionate control by giving preference over prospective purchasers to purchase a pro-rated share of the new stock. This provision is called

Select one:

a. Cumulative voting.

b. Pro-rata rights.

c. Stock warrants.

d. Preemptive rights.

21) Steve Alan, a college student, founded a start-up company called Macrosoft. Steve wants to borrow money from Bank of Washington, which will give him the loan if Steve’s father cosigns. Steve’s father agrees. He is a

Select one:

a. A security.

b. A surety.

c. A guarntor.

d. A promisor.

22) Mieko is a shareholder of Natural Gas, Inc. Natural Gas uses cumulative voting to elect directors. This means that the number of Mieko’s votes is determined by the number of

Select one:

a. Shareholders present at the shareholders’ meeting.

b.
The number of shareholder meetings that Mieko has attended.

c.
Members of the board to be elected multiplied by the total number of voting shares that Mieko holds.

d. Years that Mieko has been a shareholder.

Answer 1

19) Boris, a sole proprietor, manufactures glass containers for beverages. Boris wants to convert his business to a corporation. Just before he completes the paperwork to incorporate, Boris renews the lease on his factory. Which of the following is true?

Boris remains personally liable on the lease unless the corporation adopts it through a novation.

20) A provision in the bylaws of Wells Fergo Corporation allows each shareholder to maintain his proportionate control by giving preference over prospective purchasers to purchase a pro-rated share of the new stock. This provision is called

Preemptive rights. Preemptive rights that are given to the shareholders to buy additional shares in any future issue of the company's common stock before the shares are available to the general public

21) Steve Alan, a college student, founded a start-up company called Macrosoft. Steve wants to borrow money from Bank of Washington, which will give him the loan if Steve’s father cosigns. Steve’s father agrees. He is a A surety.

22) Mieko is a shareholder of Natural Gas, Inc. Natural Gas uses cumulative voting to elect directors. This means that the number of Mieko’s votes is determined by the number of Members of the board to be elected multiplied by the total number of voting shares that Mieko holds.