ACCTG 111B

Preference shares of stock may be issued with par or no-par value shares.

• True

• False

Answer explanation

Preference shares cannot be issued without par value.

The board of directors shall exercise the corporate powers of a corporation.

• True

• False

A shareholder in a corporation does not have the right to transact corporate business or to intervene in the management of the business.

• True

• False

Shareholder may be natural or juridical persons.

• True

• False

The board of directors is responsible for the formulation and implementation of the overall policies for the corporation.

• True

• False

Answer explanation

The board of directors is responsible for the formulation of the overall policies while the officers are responsible for its implementation.

Shares cannot be transferred without consent of the other shareholders.

• True

• False

Answer explanation

Shares CAN be transferred without the consent of other shareholders.

Shareholders of a corporation elect the board of directors, who in turn appoint the top officers of the corporation.

• True

• False

A corporation is created by mere agreement of the shareholders.

• True

• False

Answer explanation

A corporation is created by operation of law.

The limited liability of a shareholders can be viewed as both an advantage and a disadvantage.

• True

• False

Answer explanation

It is an advantage because it does not affect the personal funds of a shareholder but it is also a disadvantage because the corporation has lesser source of funds.

A corporation is a separate entity for legal purposes.

• True

• False