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1) The corporate bylaws are a standard set of rules established by the
state of incorporation. These rules are identical for all corporations in
the state, and their purpose is to ensure that the firm's managers run the
firm in accordance with state laws
2) The corporate charter is a standard document prescribed by the state
of incorporation, and its purpose is to ensure that the firm's managers
run the firm in accordance with state laws. Procedures for electing
corporate directors are contained in bylaws, while the declaration of the
activities that the firm will pursue and the number of directors are
included in the corporate charter.
3) Companies must establish a home office, or domicile, in a particular
state, and that state must be the one in which most of their business
(sales, manufacturing, and so forth) is conducted
4) Attorney fees are generally involved when a company develops its
charter and bylaws, but since these documents are voluntary, a new
corporation can avoid these costs by deciding not to have either a charter
or bylaws
5) The corporate charter is concerned with things like what business the
company will engage in, whereas the bylaws are concerned with things
like procedures for electing the board of directors
Question 14
Which of the following statements is CORRECT?
1) If expected inflation increases, interest rates are likely to increase