Exam 16: Corporations and the Sarbanes-Oxley Act

Karlovsky and Sons Inc., a retail corporation reports financial losses for three years in a row. Two larger corporations, Gatsby Retail Inc. and Chelsea Sales Corp compete to acquire Karlovsky and Sons. Initially, Chelsea Corp. places a higher bid than Gatsby Retail Inc. but eventually backs out of the merger. In the end, a Boston-based MNC named J.Y. Corp. acquires Karlovsky and Sons and permits the latter to expand as a wholesaler. Which of the following is the surviving corporation in this scenario?

An agreement that requires selling shareholders to sell their shares to the other shareholders or to the corporation at the price specified in the agreement is referred to as ________.

Dividends are distribution of profits of the corporation to shareholders.

Derrick has 2,000 shares of the Unistone Corporation which is planning to vote for two new directors. Through a special voting provision in the corporation's articles of incorporation, Derrick was able to vote for both his preferred candidates with 2,000 shares, giving him a virtual voting count of 4,000 shares. What voting rule in the articles of incorporation allows Derrick to achieve this?

________ is a doctrine that says if a shareholder dominates a corporation and uses it for improper purposes, a court of equity can disregard the corporate entity and hold the shareholder personally liable for the corporation's debts and obligations.

In case the corporation's assets are liquidated, the preferred stockholders are paid before common stockholders.

The Sarbanes-Oxley Act requires CEO and CFO certification for annual and quarterly reports.

A ________ is a long-term unsecured debt instrument that is based on a corporation's general credit standing.

Shareholders of a closely held corporation play a minor role in its management.

Which of the following is true of an S corporation?

Bylaws of a corporation must be filed with a government official.

When is the annual shareholders' meeting held?

A(n)________ is a person or a corporation that is empowered to accept service of process on behalf of a corporation and is identified in the articles of incorporation.

A duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.

Which of the following shares have the right to vote?

The determination of whether a corporate director or officer has met his or her duty of care is measured in hindsight.

A corporation in the United States that has been incorporated in another country is referred to as a(n)________ corporation.

Which of the following criteria must be met for a company to be treated as an S corporation?

Authorized shares that have been sold by the corporation are called issued shares.

A long-term debt security that is secured by some form of collateral is referred to as a ________.