1. Amy is the promoter of Wild Toad Corporation. Before the corporation comes into existence, Amy leases office space for its headquarters. Amy signs the contract, "Amy, for Wild Toad Corporation."
The corporation is formed, and all necessary filings are completed. Despite the corporation's formation, the board of directors never meets, and the corporation never conducts any business.
Further, it does not move into the office space, and it makes no payments under the lease. The landlord demands that Amy pay for the office space. Amy refuses, and the landlord sues. What is the most likely outcome?
A) Amy wins, because the corporation is liable on the contract.
B) Amy wins because the contract is void, since the corporation never agreed to be bound by the terms of the contract.
C) The landlord wins, because Amy is personally liable on the contract.
D) Amy wins, because promoters of corporations enjoy limited liability.
E) Amy wins, because the office space was never occupied.
2. Which of the following is true about the purpose(s) of a corporation?
A) A corporation must identify all specific purposes for which it has been formed.
B) The secretary of state's office will review new filings of articles of incorporation to prevent the formation of too many corporations with identical purposes.
C) A corporation can have more than one purpose, but the purposes must be related; if they are not, the state will order the corporation split up into two or more separate corporations.
D) A corporation can have either a general purpose or a limited purpose.
E) A corporation is considered to be formed for any lawful purpose, and can therefore engage in any legal activity.