The Law of Corporations and Other Business Organizations

Chapter Review Questions

1. Assume that Quality Liquor Company has
its main office in your home state, where it
transacts the majority of its wholesale liquor
business. Recently, Quality Liquor has
been taking orders from a neighboring
state. It has begun sending its salespeople
into the state in an attempt to increase its
business. Assuming that the neighboring
state follows the Model Business Corporation
Act, does Quality Liquor need to qualify
as a foreign corporation in that state?

2. What are “door-closing” statutes as they relate
to foreign corporations?

3. Explain why a foreign corporation that is
qualified in a foreign state may not be able
to transact all of the same business in the
foreign state that it is authorized to transact
in its state of domicile.

4. Assume that it is your responsibility to
qualify your corporate client, Alex Enterprises,
in a foreign state that has adopted
the Model Business Corporation Act. Will
there be a problem getting a certificate of
authority issued under the name “Alex Enterprises”?

Yes, the name must comply with the

What are the possible solutions to this
problem?

5. What is a fictitious name, and why is it
used?

6. What is the purpose of a registered agent in
a foreign state?

7. What are the possible consequences of neglecting
to file an annual registration
statement for a foreign corporation?

8. Why do many states require that the registered
office address used in their state not
be a post office box?

9. In states that follow the Model Business
Corporation Act, what steps must be taken
when the corporation amends its articles of
incorporation to change its authorized
shares of stock?

What steps must be taken when the corporation
amends its articles of incorporation
to change its corporate name?

10. Under what circumstances might it be beneficial
for a corporation to register its name
in a foreign state?