Question 1

The only "document of record" the company need NOT allow access to by the shareholders is

Accepted Answer

A)  a register of directors. 
B)  a copy of the company charter. 
C)  a copy of all special resolutions. 
D)  a register of all transfers of shares. 
E)  minute books of board of directors' meetings. 
A)  a register of directors. 
B)  a copy of the company charter. 
C)  a copy of all special resolutions. 
D)  a register of all transfers of shares. 
E)  minute books of board of directors' meetings.

Question 2

The most important disclosure by a corporation is its financial statements. To assist in the analysis and evaluation of the annual financial statement the statutes provide for the appointment by the shareholders of

Accepted Answer

A)  an official examiner. 
B)  an independent auditor. 
C)  an association inspector. 
D)  a financial director. 
E)  an external treasurer. 
A)  an official examiner. 
B)  an independent auditor. 
C)  an association inspector. 
D)  a financial director. 
E)  an external treasurer.

Question 3

Which of the following statements is INCORRECT?

Accepted Answer

A)  Officers of a corporation do not have to be shareholders of a corporation. 
B)  Shareholders of a corporation can only vote for the election of directors if they appear in person at the shareholders' meeting. 
C)  Shareholders both appoint and can remove directors of a corporation. 
D)  Shareholders will get paid last in the event of a bankruptcy. 
E)  Directors can both appoint and remove officers of a corporation. 
A)  Officers of a corporation do not have to be shareholders of a corporation. 
B)  Shareholders of a corporation can only vote for the election of directors if they appear in person at the shareholders' meeting. 
C)  Shareholders both appoint and can remove directors of a corporation. 
D)  Shareholders will get paid last in the event of a bankruptcy. 
E)  Directors can both appoint and remove officers of a corporation.

Question 4

Joseph is director of Marttel Inc. The company is thinking about buying some land in which Joseph is part owner. At the board of directors meeting where this is discussed and voted on, Joseph should

Accepted Answer

A)  be silent and refrain from voting on this matter. 
B)  graciously be absent from the meeting. 
C)  reveal, discuss, and vote on the matter since this is his fiduciary duty. 
D)  abstain from voting on the matter since this is a potential conflict of interests. 
E)  explain fully of his interests in the land, then vote his conscience. 
A)  be silent and refrain from voting on this matter. 
B)  graciously be absent from the meeting. 
C)  reveal, discuss, and vote on the matter since this is his fiduciary duty. 
D)  abstain from voting on the matter since this is a potential conflict of interests. 
E)  explain fully of his interests in the land, then vote his conscience.

Question 5

The CBCA describes relationships between the shareholders, directors, and officers of a corporation as _ ; whereas the relationships between the corporation and its customers, suppliers, and employees is referred to as _ .

Accepted Answer

A)  decision making; profit producing 
B)  external arrangements; internal arrangements 
C)  the affairs; the business 
D)  VIP functions; the enterprise 
E)  beneficiaries; external resources 
A)  decision making; profit producing 
B)  external arrangements; internal arrangements 
C)  the affairs; the business 
D)  VIP functions; the enterprise 
E)  beneficiaries; external resources

Question 6

Which of the following is a duty of directors to a corporation?

Accepted Answer

A)  to carefully document all the corporation's records 
B)  to provide statutory safeguards for the shareholders 
C)  to eliminate any conflicts of interest with the corporation 
D)  to refrain from abuse of corporate opportunity 
E)  to appoint an inspector for the financial statements 
A)  to carefully document all the corporation's records 
B)  to provide statutory safeguards for the shareholders 
C)  to eliminate any conflicts of interest with the corporation 
D)  to refrain from abuse of corporate opportunity 
E)  to appoint an inspector for the financial statements

Question 7

Explain the concepts of debt and equity capital.

Accepted Answer

Corporations when they are established,

Question 8

If a corporation is insolvent, directors can be held strictly liable to employees of the corporation for a certain amount of unpaid wages.

Accepted Answer

A) True 
 B)False

Question 9

The is quickly becoming the most widely used shareholder remedy in Canada.

Accepted Answer

A)  "just and equitable" winding- up 
B)  appraisal remedy 
C)  common law derivative action 
D)  oppression remedy 
E)  statutory derivative action 
A)  "just and equitable" winding- up 
B)  appraisal remedy 
C)  common law derivative action 
D)  oppression remedy 
E)  statutory derivative action

Question 10

The Delphi Corp. owns 60% of Lynden Sand & Gravel Inc. Delphi, with its voting power, elected all three directors on Lynden's board. Then the board decided to sell one of Lynden's gravel reserves to Delphi at only half its value. As a minority shareholder in the Lynden corporation, how have you been affected by this transaction?

Accepted Answer

The directors of Lynden have been in bre

Question 11

Margaret is a first- time shareholder to a small Canadian corporation. She has the right to all the following EXCEPT

Accepted Answer

A)  obtain names of other stockholders. 
B)  vote for a resolution that would obviously cause the corporation to suffer. 
C)  obtain financial statements and/or audit reports. 
D)  left over assets upon dissolving of the company. 
E)  a semi- annual shareholder's meeting. 
A)  obtain names of other stockholders. 
B)  vote for a resolution that would obviously cause the corporation to suffer. 
C)  obtain financial statements and/or audit reports. 
D)  left over assets upon dissolving of the company. 
E)  a semi- annual shareholder's meeting.

Question 12

Contrast the duties of a director with the duties of shareholders to the corporation.

Accepted Answer

Directors must act honestly an

Question 13

Tom inherited $15,000 from his grandfather. He wants to invest it where he can realise growth for his children's education yet have liquidity in case of emergency. HIs expectations are most likely obtained by investing in

Accepted Answer

A)  a widely held corporation. 
B)  his best friend's new auto repair shop. 
C)  a closely held corporation. 
D)  government savings bonds. 
E)  debentures. 
A)  a widely held corporation. 
B)  his best friend's new auto repair shop. 
C)  a closely held corporation. 
D)  government savings bonds. 
E)  debentures.

Question 14

Qualco Lumber Ltd. owned a timber license over 50,000 hectares of forest in British Columbia. The British Columbia government notified Qualco that it intends to cancel this valuable license. A director of Qualco immediately upon hearing of the cancellation, sells all his shares. When would that director be liable for insider trading and when would he not?

Accepted Answer

If a director has information that comes

Question 15

Unlike some U.S. courts, Canadian courts have consistently held that a controlling shareholder owes to act for the benefit of the corporation and to act for the benefit of the shareholders.

Accepted Answer

A)  a fiduciary duty; a duty of care 
B)  a duty of care; a fiduciary duty 
C)  a positive duty; no positive duty 
D)  no positive duty; no positive duty 
E)  a positive duty; a positive duty 
A)  a fiduciary duty; a duty of care 
B)  a duty of care; a fiduciary duty 
C)  a positive duty; no positive duty 
D)  no positive duty; no positive duty 
E)  a positive duty; a positive duty

Question 16

Salon Suppliers Ltd. often has difficulty coordinating between production and marketing. The 12 owners meet daily in a "directors" meeting. They usually argue, and get into impossible deadlocks on day- to- day operating decisions. This corporation needs

Accepted Answer

A)  to better blend the ownership and management. 
B)  to follow good corporate organisational structure. 
C)  to provide a counseling seminar in psychology. 
D)  to hire a business coordinator. 
E)  to assist their chief executive officer. 
A)  to better blend the ownership and management. 
B)  to follow good corporate organisational structure. 
C)  to provide a counseling seminar in psychology. 
D)  to hire a business coordinator. 
E)  to assist their chief executive officer.

Question 17

Claude will be a minority shareholder in a new corporation. All interested parties are now in a meeting to draft the incorporating documents. To protect his rights as a minority shareholder, Claude wants certain provisions included in a well drafted shareholder's agreement. Which of the following provisions is unnecessary and won't be included in such an agreement?

Accepted Answer

A)  the right to participate in management 
B)  the right to a fair price for her share interest 
C)  for the unanimous approval of all shareholders 
D)  the right to employment 
E)  for the agreement to be included inside the charter 
A)  the right to participate in management 
B)  the right to a fair price for her share interest 
C)  for the unanimous approval of all shareholders 
D)  the right to employment 
E)  for the agreement to be included inside the charter

Question 18

Explain the use of a Unanimous Shareholders' Agreement. What effect does it have on directors?

Accepted Answer

A unanimous shareholders' agreement, as

Question 19

What are the duties of directors?

Accepted Answer

The directors owe a duty to the corporat

Question 20

The decision- making function of the corporation is undertaken by the officers of the corporation.

Accepted Answer

A) True 
 B)False

Exam 28: The Internal Affairs of Corporations

The only "document of record" the company need NOT allow access to by the shareholders is

The most important disclosure by a corporation is its financial statements. To assist in the analysis and evaluation of the annual financial statement the statutes provide for the appointment by the shareholders of

Which of the following statements is INCORRECT?

Joseph is director of Marttel Inc. The company is thinking about buying some land in which Joseph is part owner. At the board of directors meeting where this is discussed and voted on, Joseph should

The CBCA describes relationships between the shareholders, directors, and officers of a corporation as _ ; whereas the relationships between the corporation and its customers, suppliers, and employees is referred to as _ .

Which of the following is a duty of directors to a corporation?

Explain the concepts of debt and equity capital.

If a corporation is insolvent, directors can be held strictly liable to employees of the corporation for a certain amount of unpaid wages.

The is quickly becoming the most widely used shareholder remedy in Canada.

Margaret is a first- time shareholder to a small Canadian corporation. She has the right to all the following EXCEPT

Contrast the duties of a director with the duties of shareholders to the corporation.

Tom inherited $15,000 from his grandfather. He wants to invest it where he can realise growth for his children's education yet have liquidity in case of emergency. HIs expectations are most likely obtained by investing in

Unlike some U.S. courts, Canadian courts have consistently held that a controlling shareholder owes to act for the benefit of the corporation and to act for the benefit of the shareholders.

Salon Suppliers Ltd. often has difficulty coordinating between production and marketing. The 12 owners meet daily in a "directors" meeting. They usually argue, and get into impossible deadlocks on day- to- day operating decisions. This corporation needs

Explain the use of a Unanimous Shareholders' Agreement. What effect does it have on directors?

What are the duties of directors?

The decision- making function of the corporation is undertaken by the officers of the corporation.

Law and Society

The Machinery of Justice

The Law of Torts

Professional Liability

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration, and Intention to Create Legal Relations

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Impeached: Mistake

Grounds Upon Which a Contract May Be Impeached: Misrepresentation, Undue Influence, and Duress

The Requirement of Writing

The Interpretation of Contracts

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

The Effect of Breach

Remedies for Breach

Sale of Goods

Leasing and Bailment

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

The External Responsibilities of a Corporation

Secured Transactions

Creditors Rights

Government Regulation of Business

International Business Transactions

Electronic Commerce

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