Business Law Final Exam

Front 1

Stock

Back 1

Something owned by at least one shareholder

Front 2

Who manages a corporation?

Back 2

Shareholders elect board of directors to manage.

Front 3

Novation

Back 3

the substitution of a new contract in place of an old one.

Front 4

Corporations tax liability

Back 4

Taxed under federal and state law as a separate "person" from its shareholders

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Alien corporation

Back 5

formed in another country doing business in the United States

Front 6

Constitutional rights of Corporations

Back 6

equal protection, access to the courts, can sue and be sued, right to due process before denial of life, liberty, and property

Front 7

Where are the express powers of a corporation found?

Back 7

Corporations articles of incorporation, laws of the state of incorporation, and in the state and federal constitution.

Front 8

Proper suffix for corporation

Back 8

"Corporation" "Corp." "Incorporated"

Front 9

Articles of Incorporation

Back 9

primary enabling document filed with the Secretary of State that includes basic information about the corporation

Front 10

How do corporate directors get their positions?

Back 10

Shareholders elect them

Front 11

Quorum

Back 11

minimum amount of members that must be present at any meeting to make the proceedings valid

Front 12

Rights of board members

Back 12

participate in corporate decisions, inspect corporate books and records, compensation, and indemnification.

Front 13

Board duty of loyalty

Back 13

subordination of personal interests to the welfare of the corporation. no competition with corporation. no corporate opportunities. no insider trading. no transaction that is detrimental to minority shareholders. no conflict of interests.

Front 14

Business judgment rule

Back 14

immunizes a director or officer from liability from consequences of a business decision gone wrong

Front 15

Proxy

Back 15

agent legally authorized to act on behalf of another party or a format that allows an investor to vote without being physically present at the meeting.

Front 16

close corporation

Back 16

corporation exempt from a number of formal rules usually governing corporations, because of the small amount of shareholders it has

Front 17

Dividend

Back 17

distribution of corporate profits or income, only as ordered by the board.

Front 18

What reasons can a shareholder petition the court for dissolution?

Back 18

Boars mishandling corporate assets, board deadlocked and irreparable injury will result, acts of directors are illegal oppressive or fraudulent, shareholders are deadlocked for two meetings and can't elect directors.

Front 19

Merger

Back 19

combination of two companies into one

Front 20

Who approves mergers and the selling of all corporate assets?

Back 20

Shareholders

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Tender offer

Back 21

public, open offer to all stockholders to tender their stock for sale at a specified price during a specified time

Front 22

Crown Jewel

Back 22

management makes company less attractive by selling company's most valuable asset

Front 23

termination of a corporation consists of two phases:

Back 23

dissolution and liquidation.

Front 24

Securities Act of 1933 and Securities Exchange Act of 1934

Back 24

designed to protect investors from deceptive, unfair and manipulative practices when buying or selling securities

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function of the SEC

Back 25

regulates disclosure facts in offerings made through national securities exchanges, investigates and prosecutes securities fraud and registration and regulation of securities brokers, dealers and investment advisors.

Front 26

Securities

Back 26

instruments such as corporate stock or limited partnership interests that evidence ownership or debt

Front 27

Criminal penalties of the 1933 Act

Back 27

up to 5 years in prison and $10,000 fine

Front 28

Which act requires continuous disclosure from certain corporations?

Back 28

Rule 10b-5

Front 29

Criminal penalties for violating 1934 Act

Back 29

10(b) and Rule 10b-5; a person faces $5 million and 20 years in prison, $25 million for partnership or corporation

Front 30

Violation of the 10b-5

Back 30

requires intent to prove civil or criminal penalties

Front 31

Which act requires CEOs to take responsibility for the accuracy of financial statements filed with the SEC?

Back 31

The Sarbanes-Oxley Act of 2002

Front 32

Property

Back 32

consists of legally protected rights and interests a person has in anything with an ascertainable value that is subject to ownership.

Front 33

Fixture

Back 33

personal property that becomes permanently affixed to real property

Front 34

Bailment

Back 34

formed by the delivery of personal property, without transfer of title, by one person (Bailor) to another (Bailee), usually under an agreement for a particular purpose.

Front 35

Rights of the Bailor

Back 35

right to have property protected and used as agreed, right to have property back at the end of bailment with service or repair done properly, right to have the Bailee not convert, right to not be bound to limitation of liability unless Bailor knows.

Front 36

Real property

Back 36

land, buildings, trees, vegetation, airspace, subsurface rights, and fixtures.

Front 37

Life estate

Back 37

estate that lasts for the life of some specified individual

Front 38

Easement

Back 38

right of a person to make limited use of another person's real property without taking anything from the property

Front 39

Leaseholds

Back 39

Gives the tenant the temporary right to exclusively possess the property

Front 40

Statute of Frauds

Back 40

requires written agreements in five types of contracts

Front 41

What is it called when the government takes real estate from a citizen for public use with just compensation?

Back 41

Transfer by EMINENT DOMAIN

Front 42

Trust

Back 42

Right of property held by one party for the benefit of another.