Under the Revised Model Business Corporation Act (MBCA), If There

question 39

Multiple Choice

Under the revised Model Business Corporation Act (MBCA) , if there are business debts following a defective incorporation, liability for the debts will be imposed upon:

• A) all purported shareholders who acted as if a corporation had been formed.
• B) shareholders and others who took no active part in the defectively formed corporation.
• C) shareholders, promoters, managers, directors, and others who mistakenly believe that the corporation is in existence.
• D) promoters, managers, and shareholders who participated in management and policy decisions, and also knew of the defective incorporation.

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Definitions:

Economic Value

A measurement of the benefit provided by a good or service to an individual or society, often quantified in terms of money.

Compounded Semi-Annually

Interest that is calculated and added to the principal twice a year, resulting in increased interest earnings due to the compound effect.

Savings

Money that has been set aside and saved, typically in a bank account, for future use or emergencies.

Account

A record summarizing all the transactions pertaining to a single item in the accounting equation.