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Corporation Formation
Chapter 39 business law
11
Law
Graduate
06/19/2013

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Cards

Term
Fiduciary Duties consist of______________ and _________________.
Definition

Duty of Care

Duty of Loyalty

Term
Duty to exercise reasonable supervision and duty to make informed decisions are components of ______________?
Definition
Duty of Care
Term
What is a key advantage of corporations?
Definition
limited liability of owners (shareholders)
Term
What is a key disadvatage of corporations?
Definition
potential to pierce the corporate veil and hold shareholders liable
Term
True or False corporations can be taxed twice?
Definition

True: corporate taxes can be taxes twice, first to the corporation, then to the shareholders via dividends

Term
Under this doctrine a corporationis liable for the torts committed by its agents or officers within the course and scope of their employment
Definition
respondeat superior
Term
Closely Held Coporations
Definition
entity in which shares are held by few shareholders, there is informal management, and restriction on transfer of sale and shares
Term
S Corporations
Definition
Avoid federal taxes under Subchapter S; no double taxation because only dividends are taxed to the shareholders as income
Term
What are the two steps to forming a corporation?
Definition

Preliminary and Promotional Activities

Legal Process of Incorporation

Term
What are the steps to forming and incorporation?
Definition

Select state

Select name

Prepare articles of incorporation

File Articles with state

Term
What is the Alter Ego theory?
Definition
corporation serves as alter ego for ajority shareholder
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