UNIT 2 HOMEWORK LAW 206
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American Military University *
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Course
206
Subject
Law
Date
Jan 9, 2024
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docx
Pages
2
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1.
ABC Corporation obtained its Certificate of Incorporation (its Charter) from the
State of Delaware. It has its headquarters and most of its employees in the State of
Massachusetts. Based on this scenario, ABC Corporation is considered a Foreign
Corporation in Massachusetts. True or False and explain answer.
True. Why is because since ABC Corporation obtained its Certificate of Incorporation (its
Charter) from the state of Delaware so it is considered a domestic corporation. Since
most of the business is done in Massachusetts it is a foreign corporation.
“A corporation is a domestic corporation in the state that has granted its charter; it is a
foreign corporation in all the other states in which it does business. For example, a
corporation organized in Delaware and doing business in Florida is domestic in Delaware
and foreign in Florida.” LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., &
Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.1119)
2.
What steps are required to form a corporation?
-Choose an available busines name that complies with your state’s corporation rules.
-Appoint the initial directors of your corporation.
-File formal paperwork, usually called “articles of incorporation,” and pay a filing fee
that ranges from $100 to $800, depending on the state where your incorporate.
-Create corporate bylaws, which lay out the operating rules for your corporation.
-Hold the first meeting of the board of directors.
-Issue stock certificates to the initial owners (shareholders) of the corporation.
-Obtain any licenses and permits that are require for your business.
Bethany K. Laurence,
How to form a Corporation
https://www.nolo.com/legal-encyclopedia/form-corporation-how-to-incorporate-
30030.html
3.
Explain the difference between a “for-profit” and “non-profit” corporation.
The difference between a “for-profit” and “non-profit” corporation is. For-profit
corporations, “issue stock to their shareholders, who invest in the corporation with the
expectation that they will earn a profit on their investment. That profit may take the form
of dividends paid by the corporation or increased market value of their shares. For-profit
corporations range from huge international organizations such as General Electric
Company to small, one-owner businesses.” LangVardt, A.W., Barnes, A.J., Prenkert, J.D.,
McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.1116)
Non-profit corporations, “do not issue stock and do not expect to make a profit. Instead,
they provide services to their members under a plan that eliminates any profit motive.
These corporations have members rather than shareholders, and none of the surplus
revenue from their operations may be distributed to their members. Since they generally
pay no income tax, nonprofit corporations can reinvest a larger share of their incomes in
the business than can for-profit corporations.” LangVardt, A.W., Barnes, A.J., Prenkert,
J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.1117)
4.
What are the possible consequences if a corporation does not qualify to conduct
intrastate business by first obtaining a “certificate of authority” from a state it does
business in?
The consequences a corporation will endure if they don’t qualify to conduct intrastate
business by obtaining a “certificate of authority” from a state it does business in is. “If
required to qualify to do intrastate business in a state, a foreign corporation must apply
for a certificate of authority from the secretary of state, pay an application fee, maintain a
registered office and a registered agent in the state, file an annual report with the
secretary of state, and pay an annual fee.
Doing intrastate business without qualifying usually subjects a foreign corporation to a
fine, in some states as much as $10,000. The MBCA disables the corporation to use the
state’s courts to bring a lawsuit until it obtains a certificate of authority. The corporation
may defend itself in the state’s courts, however, even if it has no certificate of authority.”
LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.1122)
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