Exam 18: Corporations

AstroStar,Inc.'s board of directors consists of three members-Eckhart,Dolan,and Macero.At a regular board meeting,the board selects Galiard as president of the corporation.Later,an audit reveals that during his term as president he has openly embezzled $500,000 from AstroStar.The same audit reveals that the board knew when it selected Galiard that he had been previously convicted of embezzlement.Can the corporation hold directors Eckhart,Dolan,and Macero personally liable?

As a director of InstaTalk Inc. ,Jim has a right of inspection.This right can be restricted by

Because a corporation may be liable for the misconduct of its employees,the firm needs to be careful about whom it hires and how much to monitor and supervise them.

To make informed decisions and supervise corporate officers and employees,the directors need an unrestricted right to inspect corporate books and records.

Daisy is a director of Extraction Corporation.She opposes an offer to merge Extraction with Fill Inc.because she would lose her board position.Daisy is most likely liable for breach of

If a business says it is a corporation,and a third party deals with it as a corporation,neither party can question the validity of the business's status.

A corporation is recognized under U.S.law as a person.

Avery wants to go into business as Boom! to make and market fireworks.When deciding which form of business organization would be most appropriate,Avery would normally take into account all of the following except

Brad is a shareholder of Cloud Servers Inc.He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to

All forms of business organizations limit the liability of their owners.

Spices & Seasonings Inc.is a private,for-profit corporation that is owned by eight shareholders who are not members of the same family but are personally known to one another.To avoid management problems caused by sharing control with someone the shareholders do not know or like,the firm could

Mitch is a director and officer of Numero Uno,Inc.Mitch makes a marketing decision that results in a dramatic decrease in profits for Numero Uno and its shareholders.The shareholders accuse Mitch of breaching his fiduciary duty to the corporation.What is Mitch's best defense against this accusation? Later,the Numero Uno board considers a resolution for the firm to compete with One-of-a-Kind Corporation.Mitch is a director and shareholder of One-of-a-Kind.What is Mitch's responsibility in this situation?

Paper & Scissors Inc.wants to incorporate.The primary document needed to incorporate a business is

To participate in a shareholders' meeting,a shareholder must present a proxy.

Ben is a director of Creation Corporation,an architectural firm.Without informing Creation,Ben goes into business with Design,Inc. ,a Creation competitor.Ben is liable for breach of

Because bonds do not represent debt,they need never be repaid.

Don is a shareholder of Energy Renew Inc.When the directors fail to undertake an action to redress a wrong suffered by the firm,Don files a suit on its behalf.Don's suit is

Individual state laws should be relied on to determine corporate law because,despite the existence and use of model corporation acts,there is considerable variation among the states.

Orin is a corporate officer for Pacific Trade Inc.In this capacity,Orin

Kay and Leo form Metro Delivery Inc.Responsibility for all policymaking decisions necessary to the management of corporate affairs rests with Metro's