Which of the Following Statements Is CORRECT

question 27

Multiple Choice

Which of the following statements is CORRECT?

• A) The corporate bylaws are a standard set of rules established by the state of incorporation.These rules are identical for all corporations in the state, and their purpose is to ensure that the firm's managers run the firm in accordance with state laws.
• B) The corporate charter is a standard document prescribed by the state of incorporation, and its purpose is to ensure that the firm's managers run the firm in accordance with state laws.Procedures for electing corporate directors are contained in bylaws, while the declaration of the activities that the firm will pursue and the number of directors are included in the corporate charter.
• C) Companies must establish a home office, or domicile, in a particular state, and that state must be the one in which most of their business (sales, manufacturing, and so forth) is conducted.
• D) Attorney fees are generally involved when a company develops its charter and bylaws, but since these documents are voluntary, a new corporation can avoid these costs by deciding not to have either a charter or bylaws.
• E) The corporate charter is concerned with things like what business the company will engage in, whereas the bylaws are concerned with things like procedures for electing the board of directors.

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Definitions:

Offering Size

The total value or amount of securities, such as stocks or bonds, that are made available for sale in a public offering.

Gross Proceeds

The total amount of money received from a transaction before any deductions or expenses are subtracted.

Direct Private Long-term Debt Financing

A method of funding where companies borrow money directly from lenders on a long-term basis without public issuance through financial markets.

Public Issues

Refers to the offering of securities, like stocks or bonds, to the public to raise capital.