Question 1

Voting agreements among shareholders of a corporation are usually considered to be void.

Accepted Answer

A) True 
 B)False

Question 2

Corporate officers are elected by the board of directors at such time and by such manner as prescribed in the corporation's bylaws.

Accepted Answer

A) True 
 B)False

Question 3

The board of directors has the authority to appoint the officers of the corporation only with shareholder approval.

Accepted Answer

A) True 
 B)False

Question 4

What is the effect of a corporation using cumulative voting?

Accepted Answer

A)  Shareholders who miss a meeting can save those unused votes to be voted at a later meeting. 
B)  All votes taken at a shareholders' meeting will be conducted at the end of the meeting. 
C)  When several issues at a shareholders' meeting will be voted on, a shareholder can choose to abstain from voting on some issues, and save those votes for more important shareholder issues. 
D)  When electing members of the board of directors, the votes may be aggregated in such a way that minority shareholders will be more likely to get at least some representation on the board. 
E)  When electing members of the board of directors, the votes may not be aggregated in such a way that minority shareholders will be more likely to get at least some representation on the board. 
A)  Shareholders who miss a meeting can save those unused votes to be voted at a later meeting. 
B)  All votes taken at a shareholders' meeting will be conducted at the end of the meeting. 
C)  When several issues at a shareholders' meeting will be voted on, a shareholder can choose to abstain from voting on some issues, and save those votes for more important shareholder issues. 
D)  When electing members of the board of directors, the votes may be aggregated in such a way that minority shareholders will be more likely to get at least some representation on the board. 
E)  When electing members of the board of directors, the votes may not be aggregated in such a way that minority shareholders will be more likely to get at least some representation on the board.

Question 5

The board of directors is responsible for formulating the policy decisions that affect the management,supervision,control,and operation of the corporation.

Accepted Answer

A) True 
 B)False

Question 6

Proxies may be in writing or posted online.

Accepted Answer

A) True 
 B)False

Question 7

The two general types of shareholders' meetings are:

Accepted Answer

A)  annual and special. 
B)  annual and quarterly. 
C)  general and annual. 
D)  general and special. 
E)  general and quarterly. 
A)  annual and special. 
B)  annual and quarterly. 
C)  general and annual. 
D)  general and special. 
E)  general and quarterly.

Question 8

Under what circumstances can the terms of directors be staggered such that only a portion of the board members' terms expire in any one year?

Accepted Answer

A)  under any circumstances 
B)  in closely-held corporations 
C)  when there are both inside and outside directors 
D)  when there are nine or more members of the board of directors 
E)  Under no circumstances can the terms of directors be staggered such that only a portion of the board members' terms expire in any one year. 
A)  under any circumstances 
B)  in closely-held corporations 
C)  when there are both inside and outside directors 
D)  when there are nine or more members of the board of directors 
E)  Under no circumstances can the terms of directors be staggered such that only a portion of the board members' terms expire in any one year.

Question 9

A simple majority of the number of directors established in the articles of incorporation or bylaws usually constitutes a quorum.

Accepted Answer

A) True 
 B)False

Question 10

The Revised Model Business Corporation Act (RMBCA)permits corporations to grant more than one vote per share to some classes of stock and less than one vote per share to others.

Accepted Answer

A) True 
 B)False

Question 11

The "right of first refusal" is an agreement entered into by shareholders where they grant each other the right of first refusal to purchase shares they are going to sell.

Accepted Answer

A) True 
 B)False

Question 12

Actions of the board of directors are absolute,and never require shareholder approval.

Accepted Answer

A) True 
 B)False

Question 13

To satisfy the fiduciary duty of care,directors and officers of a corporation must discharge their duties in good faith,with the care that an ordinary prudent person in a similar position would use under similar circumstances,and in a manner they reasonably believe to be in the best interests of the corporation.

Accepted Answer

A) True 
 B)False

Question 14

Special shareholders' meetings may be called by the board of directors,the holders of at least ten (10)percent of the voting shares of the corporation,or any other person authorized to do so by the articles of incorporation or bylaws.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true about voting trusts related to shares of corporate stock?

Accepted Answer

A)  They can be oral or written, and are effective for an indefinite period of time. 
B)  They must be written, and cannot exceed ten years. 
C)  They can be oral or written, and cannot exceed ten years. 
D)  They must be written, and cannot exceed one year. 
E)  They must be written, and are valid for the remaining existence of the corporation. 
A)  They can be oral or written, and are effective for an indefinite period of time. 
B)  They must be written, and cannot exceed ten years. 
C)  They can be oral or written, and cannot exceed ten years. 
D)  They must be written, and cannot exceed one year. 
E)  They must be written, and are valid for the remaining existence of the corporation.

Question 16

If corporate directors or officers steal a corporate opportunity for themselves,this is known as usurping a corporate opportunity.

Accepted Answer

A) True 
 B)False

Question 17

Corporate directors are responsible for making policy decisions and employing officers of the corporation.

Accepted Answer

A) True 
 B)False

Question 18

Directors and officers of a corporation owe a fiduciary duty to act honestly.This duty,called the duty of ________,requires directors and officers to subordinate their personal interests to those of the corporation and its shareholders.

Accepted Answer

A)  care 
B)  loyalty 
C)  good faith 
D)  obedience 
E)  a fiduciary 
A)  care 
B)  loyalty 
C)  good faith 
D)  obedience 
E)  a fiduciary

Question 19

Which method of voting would give minority shareholders the best chance to elect someone to the board of directors of a corporation?

Accepted Answer

A)  cumulative 
B)  noncumulative 
C)  proxy 
D)  supermajority 
E)  preemptive 
A)  cumulative 
B)  noncumulative 
C)  proxy 
D)  supermajority 
E)  preemptive

Question 20

Under the distributive method of voting for the election of directors,a shareholder can accumulate all of his or her votes and vote them all for one candidate or split them among several candidates.

Accepted Answer

A) True 
 B)False

Exam 28: Corporate Governance and Sarbanes-Oxley Act

Voting agreements among shareholders of a corporation are usually considered to be void.

Corporate officers are elected by the board of directors at such time and by such manner as prescribed in the corporation's bylaws.

The board of directors has the authority to appoint the officers of the corporation only with shareholder approval.

What is the effect of a corporation using cumulative voting?

The board of directors is responsible for formulating the policy decisions that affect the management,supervision,control,and operation of the corporation.

Proxies may be in writing or posted online.

The two general types of shareholders' meetings are:

Under what circumstances can the terms of directors be staggered such that only a portion of the board members' terms expire in any one year?

A simple majority of the number of directors established in the articles of incorporation or bylaws usually constitutes a quorum.

The Revised Model Business Corporation Act (RMBCA)permits corporations to grant more than one vote per share to some classes of stock and less than one vote per share to others.

The "right of first refusal" is an agreement entered into by shareholders where they grant each other the right of first refusal to purchase shares they are going to sell.

Actions of the board of directors are absolute,and never require shareholder approval.

Special shareholders' meetings may be called by the board of directors,the holders of at least ten (10)percent of the voting shares of the corporation,or any other person authorized to do so by the articles of incorporation or bylaws.

Which of the following is true about voting trusts related to shares of corporate stock?

If corporate directors or officers steal a corporate opportunity for themselves,this is known as usurping a corporate opportunity.

Corporate directors are responsible for making policy decisions and employing officers of the corporation.

Directors and officers of a corporation owe a fiduciary duty to act honestly.This duty,called the duty of ________,requires directors and officers to subordinate their personal interests to those of the corporation and its shareholders.

Which method of voting would give minority shareholders the best chance to elect someone to the board of directors of a corporation?

Under the distributive method of voting for the election of directors,a shareholder can accumulate all of his or her votes and vote them all for one candidate or split them among several candidates.

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