Exam 37: Corporate Governance and the Sarbanes Oxley Act

Dividends may be paid out of which of the following?

Absent an agreement to the contrary,a corporate officer can be removed by the board of directors anytime the removal is deemed to be in the corporation's best interest.

Ralph is the president of JKL Corporation.Ralph knows that Shark Co.is looking to acquire a corporation much like JKL.Therefore,Ralph enters into negotiations with Shark,and finally signs a contract with Shark for the sale of nearly all the assets of JKL to Shark.Ralph takes the contract back to the board of directors,which passes a resolution accepting the sale of the assets to Shark.This is an example of the president's:

Bob formed Bob's Brake Repair,Inc.in 1995.Bob has been the only shareholder since the corporation was formed.Bob has never worried about the corporate formalities since,as the only shareholder,he didn't worry about suing himself.He kept a single bank account and didn't always use the word "incorporated" on his signs and work orders.Recently,the brakes failed on a customer's car shortly after one of Bob's employees had repaired them.Can the person injured by the brake failure recover from Bob's personal assets?

Shareholders generally have liability for the debts and obligations of the corporation beyond their capital contribution.

A voting trust is an agreement between two or more shareholders on how they will vote their shares.

Where the bylaws require a simple majority vote of shareholders for a particular action,what is the legal significance of a unanimous vote instead of simple majority vote?

A proxy may validly be given orally or in writing.

A special shareholders' meeting agenda is limited to items stated in the notice of the meeting.

The election of directors of the corporation may be held by electronic transmission.

Self-dealing by a director of a corporation can best be described as:

Which of the following situations,by itself,would not justify a court disregarding the corporate entity?

The two general types of shareholders' meetings are:

Corporations are required to hold annual shareholders' meetings.

Who may call a special shareholders' meeting if the bylaws do not address this issue?

Because one of the characteristics of a corporation is the free transferability of shares of stock,an agreement attempting to restrict that right is generally unenforceable.

Shareholders agreements are entered into by the shareholders of many closely held corporations.What are the purposes of such agreements? What are the risks for shareholders of entering into such agreements? Under what circumstances should a court refuse to enforce such agreements?

Delivery of notices to stockholders may be made electronically with the stockholder's consent.

Under the straight voting method,a majority shareholder can elect the entire board of directors.

Sean owns stock in the Cardinal Corporation.All of the shareholders have agreed that if one wants to sell his or her shares,he or she must offer to sell them to the other shareholders.If the other shareholders do not buy the shares,the selling shareholder may sell them to anyone else.This type of arrangement is known as a(n):