Under the Revised Model Business Corporation Act, If a Promoter

question 61

Multiple Choice

Under the Revised Model Business Corporation Act, if a promoter acts on behalf of a corporation knowing that incorporation has not yet been completed and liability occurs:

• A) the corporation becomes liable once formed, with the promoter shielded from liability.
• B) the principals of the forming corporation are liable, with the promoter shielded from liability.
• C) the promoter is jointly and severally liable for the liability incurred even after the corporation is formed.
• D) the promoter is personally liable, with the principals shielded from liability.

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Definitions:

Journal Entry

A recording of financial transactions in the accounting records, detailing the accounts affected, amounts, and date.

Chart of Accounts

An organized list of all ledger account titles and numbers used by a company, detailing all transactions' recording places.

General Ledger

A comprehensive record of all financial transactions of a company, systematically organized by accounts.

Net Income

The remaining earnings of a company following the deduction of all expenses and taxes from its total income.