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37 Cards in this Set
- Front
- Back
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A stock subscription agreement signed before incorporation may obligate a person to purchase shares in the corporation. True or False
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True
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Each director has one vote. True or False
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True |
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The Revised Model Business Corporation Act forbids directors' meetings being held via telephone. True or False
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False
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Shareholders are directly responsible for the daily management of a corporation. True or False
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False
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Directors and officers have a fiduciary duty of care. True or False
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True
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When directors or officers violate their duty of loyalty, they are self-dealing. True or False
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True
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A board of directors may take no action that benefits a director in his or her personal capacity. True or False
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False
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A shareholder can file a direct suit against a director if the director has caused harm to the business by violating a fiduciary duty. True or False
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False
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A shareholder may not be held personally liable to a corporation for receiving watered stock. True or False
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False
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In most states, a corporation's bylaws can negate preemptive rights. True or False
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True
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Which of the following is true regarding the Revised Model Business Corporations Act? A. It has been adopted at least in part in over half of the states. B. It has been fully rejected in over half of the states in favor of the Model Business Corp. C. It has been adopted fully by 75% of states. D. It has been rejected in over half of states in favor of Model Corporation Act. E. There is no Revised Model Business Corp |
A. It has been adopted at least in part in over half of the states
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The French Penal Code adopts what is called the _________ which requires that corporation criminal liability be applied only in cases that pertain to an "express mention in the law or in a French regulation." A. Strict liability rule B. Res ipsa standard C. Specialty principal D. High priority rule E. Protectionist principal |
C. Specialty principal
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How are directors typically chosen after the incorporation process? A. By majority vote of shareholders B. By majority vote of all officers C. By a 2/3 vote of shareholders D. The president appoints them in his or her discretion E. By a unanimous vote of the shareholders |
A. By majority vote of shareholders
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Which of the following is true regarding how directors are chosen during incorporation? A. Prior to incorporation, either incorporators appoint them or the corporate articles name them. B. Prior to incorporation, either the incorporators appoint them or by a majority vote of the shareholders. C. Prior to incorporation, directors may only be named through the incorporators appointing them D. Prior to incorporation, directors may only be named by the corporate articles naming them. E. Prior to incorporation, directors may only be named by the president appointing them. |
A. Prior to incorporation, either the incorporators appoint them or the corporate articles name them.
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How is the number of corporate directors determined? A. In the discretion of the president of the corp B. By vote of the stockholders C. According to the corporation articles or bylaws. D. According to the number of shares issued. E. According to the amount of profit by incorporators for the first year. |
C. According to the corporation articles or bylaws.
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If a corporation has fewer than ______shareholders, the Revised Model Business Corp Act allows companies to eliminate the board of directors entirely. A. 100 B. 50 C. 30 D. 25 E. 10 |
B. 50
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Although some states allow for longer terms under certain circumstances, for how long do directors typically serve? A. 3 years B. 2 years C. 1 year D. 4 years E. 5 years |
C. 1 year
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For which of the following may a director generally be removed? A. At the will of the president. B. In the discretion of the shareholders upon majority vote. C. In the discretion of the shareholders upon 2/3 vote. D. In the discretion of other directors upon a majority vote. E. For cause. |
E. For cause
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Which of the following is a term for a requirement that a minimum number of directors be present at a meeting for decisions made at the meeting to be valid? A. Quorum B. Substantial group C. Adequate group D. Adequate assembly E. Substantial assembly |
A. Quorum
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While ordinary decisions made by directors require a ________ vote, more important decisions sometimes require a ______ vote. A. Majority, 2/3 B. Majority, 3/4 C. 2/3; 3/4 D. 1/3; majority E. Majority; unanimous |
A. Majority; 2/3
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Which of the following are directors who are also officers or employees of the corporation? A. Approved directors B. Outside directors C. Inside directors D. Affiliated directors E. Unaffiliated directors |
C. Inside directors
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Which of the following are directors who are not officers or employees of the corporation? A. Approved directors B. Outside directors C. Inside directors D. Affiliated directors E. Unaffiliated directors |
B. Outside directors
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Which of the following are outside directors who have business contacts with the corporation? A. Approved directors B. Associated directors C. Inside directors D. Affiliated directors E. Unaffiliated directors |
D. Affiliated directors
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Which of the following are outside directors who do not have business contacts with the corp? A. Approved directors B. Associated directors C. Inside directors D. Affiliated directors E. Unaffiliated directors |
E. Unaffiliated directors
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Which of the following is false regarding officers of a corporation? A. Officers are executive managers. B. Officers run the day-to-day business of the corporation C. In most cases an individual may serve as both a director and an officer D. The rules of agency do not apply to the work of officers. E. Qualifications required of officers are set forth in the corporate articles and bylaws. |
D. The rules of agency do not apply to the work of officers.
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Which of the following owns a corporation? A. Directors B. Officers C. Shareholders D. Affiliates E. The State |
C. Shareholders
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Which of the following are sent to shareholders prior to an annual meeting containing proposals made by shareholders? A. Meeting agenda B. Proxy materials C. Presidential materials D. Officer materials E. Meeting proposals |
B. Proxy materials
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The Securities and Exchange commission has established that any shareholder who owns more than _______ worth of stock in the corporation can submit proposals to be included in proxy materials. A. $5000 B. $4000 C. $3000 D $2000 E. $1000 |
E. $1000
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Generally, a quorum of shareholders exist when shareholders holding more than _____ percent of the outstanding shares are present. A. 80 B. 70 C. 60 D. 50 E. 25 |
D. 50
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Which of the following, if any, is an authorization of a shareholders to allow someone else to vote in his or her place? A. Approval B. Acknowledgement C. Proxy D. Permissive voucher E. There is no such document because a shareholder may not allow someone else to vote in the shareholder's place. |
C. Proxy
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Under the Revised Model Business Corp Act, how long do proxies last if they are not withdrawn? A. 9 months. B. 11 months. C. 1 year. D. 16 months. E. 2 years |
B. 11 months
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An individual shareholder can enter a voting trust in which he or she transfers share titles to a trustee in exchange for a _______. A. Voting trust certificate B. Proxy C. Voting acknowledgement D. Trustee voting agreement E. Trust acknowledgement |
A. Voting trust certificate
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In a closely held corporation, a breach of the duty of a majority shareholder to act with care and loyalty when selling his or her shares is known as _______. A. Oppressive conduct B. Majority holder misconduct C. Minority oppression D. Minority discrimination E. Disloyal procedure |
A. Oppressive conduct
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Decisions of courts in _______ have a significant impact because more than half of the US public traded corp are incorporated here. A. NY B. California C. Florida D. Delaware E. NJ |
D. Delaware
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Which of the following is false regarding the liability of directors and officers for criminal behavior in the US? A. Directors & Officers can be held personally responsible for their own crimes. B. Directors & Officers can be held personally responsible for the crimes of other employees within the organization. C. A court may not find a corporate officer criminally liable for conduct of an employee unless the officer profited personally from the illegal activity. |
C. A court may not find a corporate officer criminally liable for conduct of an employee unless the officer profited personally from the illegal activity.
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Which of the following references shares that have a fixed face value noted on the stock certificate? A. No par value shares. B. Par value shares. C. Watered stock. D. Valued stock. E. No valued stock |
B. Par value shares
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