BUSA $3276$

Spring $2024$

Exam Five

Christine and two of her relatives decide to form a corporation in the State of Tennessee called Big Events Catering, Inc. As the name suggests, the business will focus on catering large events. Christine and each of her relatives live in Tennessee. Christine will own $50\%$ of Big Events, and her relatives will each own $25\%.$ Christine promises her relatives $"$no corporate meetings, no corporate formalities, we'll just run Big Events together and make some easy money."

Christine filed the necessary Articles of Incorporation in Tennessee to legally form Big Events as a corporation. The next day, Christine opened a bank account in the name of Big Events to deposit all catering business revenue, to pay all expenses of the catering business, and to make distributions of Big Events' profits to the owners, including herself. Excited about the success of the new business, Christine used the Big Events bank account to buy a new car, a country club membership, and a new wardrobe for herself. Christine also made several donations of money and leftover food from Big Events catering jobs to local charities. In addition, Christine used the Big Events bank account to pay personal expenses for her co$-$owners on many occasions, usually when one of her relatives ran into a difficult financial situation.