Question 1

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

Accepted Answer

Dissolution requires that the corporation devote itself to winding up its affairs and liquidating its assets.After dissolution,the corporation must cease carrying on its business except as is necessary to wind up.When a corporation is dissolved,its assets are liquidated and used first to pay the expenses of liquidation and its creditors according to their respective contract or lien rights.Any remainder is proportionately distributed to shareholders according to their respective contract rights.Statutory provisions governing dissolution and liquidation usually include the following safeguards to the interest of the corporation's creditors: mailing of notice to known creditors,general publication of notice,and preservation of claims against the corporation.

Question 2

A short-form merger:

Accepted Answer

A)  is not a merger at all but a form of consolidation. 
B)  may be undertaken only with the subsidiary's directors' approval. 
C)  allows no appraisal rights for the parent's minority shareholders. 
D)  requires shareholder approval. 
A)  is not a merger at all but a form of consolidation. 
B)  may be undertaken only with the subsidiary's directors' approval. 
C)  allows no appraisal rights for the parent's minority shareholders. 
D)  requires shareholder approval. C

Question 3

A corporation must notify the shareholders of the existence of dissenters' rights before taking the vote on the corporate action.

Accepted Answer

A) True 
 B)False  True

Question 4

The Action Corporation and the Braker Corporation combine to form the Cable Corporation.This is a merger.

Accepted Answer

A) True 
 B)False

Question 5

A corporation may accomplish acquiring all or substantially all assets of another corporation by:

Accepted Answer

A)  purchase or lease of the other corporations' assets. 
B)  purchase of a controlling stock interest in other corporations. 
C)  merger or consolidation with other corporations. 
D)  All of these. 
A)  purchase or lease of the other corporations' assets. 
B)  purchase of a controlling stock interest in other corporations. 
C)  merger or consolidation with other corporations. 
D)  All of these.

Question 6

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter by fraud or if the corporation continues to exceed or abuse the authority that was conferred on it.

Accepted Answer

A) True 
 B)False

Question 7

A sale of substantially all of the assets of a corporation in the ordinary course of business of the corporation will not require shareholder approval.

Accepted Answer

A) True 
 B)False

Question 8

The 2002 amendments to the Revised Act provide for procedures permitting:

Accepted Answer

A)  a corporation to change its state of incorporation. 
B)  a domestic business corporation to become a domestic or foreign partnership or LLC. 
C)  Both of these. 
D)  Neither of these. 
A)  a corporation to change its state of incorporation. 
B)  a domestic business corporation to become a domestic or foreign partnership or LLC. 
C)  Both of these. 
D)  Neither of these.

Question 9

A compulsory share exchange:

Accepted Answer

A)  is a transaction by which the corporation becomes the owner of all the outstanding shares of one or more classes of another corporation by an exchange that is compulsory on all owners of the acquired shares. 
B)  may be carried out by a corporation acquiring shares in another corporation with its or any other corporation's shares or other securities,but not for cash or other property. 
C)  affects the separate existence of the corporate parties to the transaction. 
D)  All of these. 
A)  is a transaction by which the corporation becomes the owner of all the outstanding shares of one or more classes of another corporation by an exchange that is compulsory on all owners of the acquired shares. 
B)  may be carried out by a corporation acquiring shares in another corporation with its or any other corporation's shares or other securities,but not for cash or other property. 
C)  affects the separate existence of the corporate parties to the transaction. 
D)  All of these.

Question 10

A corporation that buys the assets of another corporation does not assume the other's liability unless the:

Accepted Answer

A)  purchaser,expressly or impliedly,agrees to assume the seller's liabilities. 
B)  transaction amounts to a consolidation or merger of the two corporations. 
C)  sale is for the fraudulent purpose of avoiding the liabilities of the seller. 
D)  All of these. 
A)  purchaser,expressly or impliedly,agrees to assume the seller's liabilities. 
B)  transaction amounts to a consolidation or merger of the two corporations. 
C)  sale is for the fraudulent purpose of avoiding the liabilities of the seller. 
D)  All of these.

Question 11

AB Corporation consolidates with YZ Corporation to form A-Z Corporation.The debts of AB Corporation are:

Accepted Answer

A)  assumed by the stockholders of AB Corporation. 
B)  discharged by the process of consolidation. 
C)  assumed by the new corporation. 
D)  discharged by the issuance of new stock in A-Z Corporation. 
A)  assumed by the stockholders of AB Corporation. 
B)  discharged by the process of consolidation. 
C)  assumed by the new corporation. 
D)  discharged by the issuance of new stock in A-Z Corporation.

Question 12

The consolidation of AB Corporation and YZ Corporation requires the affirmative majority vote of:

Accepted Answer

A)  the boards of directors and shareholders of both corporations. 
B)  the boards of directors of both corporations,but not the shareholders. 
C)  the shareholders of both corporations,but not the boards of directors. 
D)  the directors and shareholders of one of the corporations,but not both corporations. 
A)  the boards of directors and shareholders of both corporations. 
B)  the boards of directors of both corporations,but not the shareholders. 
C)  the shareholders of both corporations,but not the boards of directors. 
D)  the directors and shareholders of one of the corporations,but not both corporations.

Question 13

The state,a shareholder,or a creditor may bring a proceeding seeking judicial dissolution.

Accepted Answer

A) True 
 B)False

Question 14

The Action Corporation and the Braker Corporation combine into the Action Corporation.This is a consolidation.

Accepted Answer

A) True 
 B)False

Question 15

If Jax Corporation and Kaz Corporation combine all of their assets and create a consolidated corporation,Jax Corporation and Kaz Corporation will cease to exist.

Accepted Answer

A) True 
 B)False

Question 16

Once a corporation becomes publicly held,it cannot return to being private.

Accepted Answer

A) True 
 B)False

Question 17

The courts may grant a petition of involuntary dissolution if shareholders:

Accepted Answer

A)  do not approve of fundamental changes of the board. 
B)  show that the corporation has not kept adequate records or filed annual reports. 
C)  did not receive their dividends. 
D)  show that corporate assets are being squandered. 
A)  do not approve of fundamental changes of the board. 
B)  show that the corporation has not kept adequate records or filed annual reports. 
C)  did not receive their dividends. 
D)  show that corporate assets are being squandered.

Question 18

The Revised Act grants dissenters' rights to:

Accepted Answer

A)  a shareholder when any amendment to the articles of incorporation materially and adversely affects that dissenter's rights regarding his shares. 
B)  dissenting shareholders of a corporation leasing substantially all of its assets in the usual course of business. 
C)  dissenting shareholders of each corporate party to a short-form merger. 
D)  All of these. 
A)  a shareholder when any amendment to the articles of incorporation materially and adversely affects that dissenter's rights regarding his shares. 
B)  dissenting shareholders of a corporation leasing substantially all of its assets in the usual course of business. 
C)  dissenting shareholders of each corporate party to a short-form merger. 
D)  All of these.

Question 19

The state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax.

Accepted Answer

A) True 
 B)False

Question 20

If Able Corporation purchases all of the stock of Beta Corporation rather than all of its assets,there is now a change in Beta Corporation's legal status.

Accepted Answer

A) True 
 B)False

Exam 36: Fundamental Changes

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

A short-form merger:

A corporation must notify the shareholders of the existence of dissenters' rights before taking the vote on the corporate action.

The Action Corporation and the Braker Corporation combine to form the Cable Corporation.This is a merger.

A corporation may accomplish acquiring all or substantially all assets of another corporation by:

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter by fraud or if the corporation continues to exceed or abuse the authority that was conferred on it.

A sale of substantially all of the assets of a corporation in the ordinary course of business of the corporation will not require shareholder approval.

The 2002 amendments to the Revised Act provide for procedures permitting:

A compulsory share exchange:

A corporation that buys the assets of another corporation does not assume the other's liability unless the:

AB Corporation consolidates with YZ Corporation to form A-Z Corporation.The debts of AB Corporation are:

The consolidation of AB Corporation and YZ Corporation requires the affirmative majority vote of:

The state,a shareholder,or a creditor may bring a proceeding seeking judicial dissolution.

The Action Corporation and the Braker Corporation combine into the Action Corporation.This is a consolidation.

If Jax Corporation and Kaz Corporation combine all of their assets and create a consolidated corporation,Jax Corporation and Kaz Corporation will cease to exist.

Once a corporation becomes publicly held,it cannot return to being private.

The courts may grant a petition of involuntary dissolution if shareholders:

The Revised Act grants dissenters' rights to:

The state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax.

If Able Corporation purchases all of the stock of Beta Corporation rather than all of its assets,there is now a change in Beta Corporation's legal status.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature,formation,and Powers

Financial Structure

Management Structure

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms