Assessment, Ch. 41-44 Second Review Question Preview (ID: 50697)
Business Law II, Spring 2020 Chapter 41-44 Test, Second Review.
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Unless a corporation’s articles of incorporation provide otherwise, the purpose clause for a corporation by default is:
a) to create wealth
b) to serve the community
c) to engage in any lawful business
d) to provide a service or product that is better for society as a whole
Straight voting permits a single holder of more than 30 percent of the shares of a corporation to dominate the management of the corporation.
a) true
b) false
c)
d)
The _____ requires periodic shareholder approval of executive compensation.
a) Sarbanes-Oxley Act
b) Debbie Smith Act
c) Burnett Act
d) Dodd-Frank wall Street Reform and Consumer Protection Act
What is meant by rational basis?
a) A decision has been taken after a long discussion.
b) A decision has been taken after protracted negotiations.
c) A decision has a logical connection to the facts.
d) A decision has the consent of all board members.
In the case in the text, Coggins v. New England Patriots Football Club, Inc., the court held that:
a) The freeze-out of majority shareholders failed to meet the intrinsic fairness test.
b) The freeze-out of majority shareholders failed to meet the business purpose test.
c) Freezing out minority shareholders merely to allow the corporation to repay the majority shareholder’s personal debts was not
d) Freezing out the minority shareholders was necessary to further the corporation’s purpose.
Which officer of the corporation has custody of the corporation's funds?
a) Chief Information Officer
b) Vice President
c) Treasurer
d) Secretary
The ultra vires doctrine states that:
a) any action of a corporation beyond its stated powers is void.
b) the corporation may engage in any lawful business.
c) the board of directors must manage the corporation.
d) a corporation is liable for an employee's tort that is connected to the authorized conduct of the employee.
Generally, under the doctrine of respondeat superior, a corporation is liable for an employee's tort that is reasonably connected to the authorized conduct of the employee.
a) true
b) false
c)
d)
The ______ recognizes that directors may be conflicted by their interest in saving their jobs, yet it allows directors to oppose the takeover if they mostly are concerned about protecting the company from the takeover’s threat to the company’s polici
a) Unocal test
b) Dodd-Frank Wall Street Reform and COnsumer Protection Act
c) business judgment rule
d) Sarbanes-Oxley Act
Which of the following is correct concerning the management of close corporations?
a) Modern close corporation statutes require close corporations to comply with most management formalities.
b) The California General Corporation Law permits a close corporation to be managed as if it were a sole proprietorship.
c) The MBCA Statutory Close Corporation Supplement permits a close corporation to dispense with shareholders and directors.
d) The MBCA Statutory Close Corporation Supplement grants the shareholders unlimited power to restrict the discretion of the boa
After a merger, the first corporation remains liable for its debt.
a) true
b) false
c)
d)
Only those shareholders who sign a shareholder voting agreement are bound by it.
a) true
b) false
c)
d)
A corporation's sale of substantially all of the assets of the business must be approved by its shareholders.
a) true
b) false
c)
d)
Camm Corp. has 10,000,000 common shares outstanding. Its four directors are elected by cumulative voting. To elect one director, a shareholder must own at least:
a) 5 million shares
b) 2,500,001 shares
c) 5,000,001 shares
d) 2,000,001 shares
In Montgomery Cellular Holding Co., Inc. v. Dobler, the case in the text, the court applied the ______ test to review competing valuations of minority shares.
a) International Shoe
b) reasonable corporation
c) reasonable person
d) Weinberger
Most state statutes and the Model Business Corporation Act (MBCA) provide that a quarterly meeting of shareholders shall be held.
a) true
b) false
c)
d)
Some courts have held that certain shareholders are fiduciaries of each other. These are shareholders of:
a) nonprofit corporations
b) close corporations
c) publicly traded corporations
d) open corporations
If a shareholder is successful in a derivative suit, she is entitled to a reimbursement of her reasonable litigation expenses paid by:
a) the corporation
b) the arbitrator
c) the incorporator
d) the secretary of state
Repurchase of _____ shares by a corporation is involuntary on the shareholder's part.
a) preferred
b) split
c) outstanding
d) fractional
Distributions of a corporation’s assets received by a shareholder with knowledge of their illegality may be recovered on behalf of the corporation.
a) true
b) false
c)
d)
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