Question 1

The consolidation of AB Corporation and ZX Corporation requires the affirmative majority vote of:

Accepted Answer

A) the boards of directors and shareholders of both corporations. 
B) the boards of directors of both corporations, but not the shareholders. 
C) the shareholders of both corporations, but not the boards of directors. 
D) the directors and shareholders of one of the corporations, but not both corporations. 
A) the boards of directors and shareholders of both corporations. 
B) the boards of directors of both corporations, but not the shareholders. 
C) the shareholders of both corporations, but not the boards of directors. 
D) the directors and shareholders of one of the corporations, but not both corporations.

Question 2

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

Accepted Answer

Dissolution requires that the corporatio

Question 3

Dissolution of a corporation does not terminate its existence and does not require that it liquidate its assets.

Accepted Answer

A) True 
 B)False

Question 4

Brown Corporation purchased all of the stock of Grey Corporation.The appraisal remedy is not available to a dissenting shareholder of Brown Corporation.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is NOT a basis for involuntary dissolution?

Accepted Answer

A) By the Secretary of State, if it is established that the corporation failed to pay its franchise tax 
B) By a shareholder, if the directors are deadlocked and the shareholders cannot break the deadlock 
C) By the shareholders, if they dissent to a merger and are asserting their appraisal rights 
D) None of these 
A) By the Secretary of State, if it is established that the corporation failed to pay its franchise tax 
B) By a shareholder, if the directors are deadlocked and the shareholders cannot break the deadlock 
C) By the shareholders, if they dissent to a merger and are asserting their appraisal rights 
D) None of these

Question 6

Which of the following is a prerequisite for requesting appraisal rights?

Accepted Answer

A) Make a verbal demand 
B) Meet the statutory time limit 
C) Get an independent appraisal of the stock's value 
D) None of these. 
A) Make a verbal demand 
B) Meet the statutory time limit 
C) Get an independent appraisal of the stock's value 
D) None of these.

Question 7

A creditor may petition the court to judicially dissolve a corporation if he has an unsatisfied judgment against the corporation and:

Accepted Answer

A) the corporation is insolvent. 
B) the creditor will become insolvent if not paid. 
C) the debt is over $5,000. 
D) All of these. 
A) the corporation is insolvent. 
B) the creditor will become insolvent if not paid. 
C) the debt is over $5,000. 
D) All of these.

Question 8

In many states, dissolution that is nonjudicial may be brought about when:

Accepted Answer

A) all the shareholders agree to dissolve, even without action by the board. 
B) the board of directors agrees to dissolve. 
C) the creditors petition the court. 
D) the business of the corporation becomes obsolete. 
A) all the shareholders agree to dissolve, even without action by the board. 
B) the board of directors agrees to dissolve. 
C) the creditors petition the court. 
D) the business of the corporation becomes obsolete.

Question 9

The Action Corporation and the Braker Corporation combine into the Action Corporation.This is a consolidation.

Accepted Answer

A) True 
 B)False

Question 10

If a shareholder dissents to a proposed business combination, he is entitled to receive the fair value of his shares.In order to do so, the shareholder must do which of the following?

Accepted Answer

A) Attack the validity of the corporate action that gives rise to his right to obtain payment or to have the action rescinded 
B) Obtain an appraisal of the value of the shares 
C) Oppose the proposed corporate action verbally at a special meeting of the stockholders 
D) Make a written demand upon the corporation within the set time period 
A) Attack the validity of the corporate action that gives rise to his right to obtain payment or to have the action rescinded 
B) Obtain an appraisal of the value of the shares 
C) Oppose the proposed corporate action verbally at a special meeting of the stockholders 
D) Make a written demand upon the corporation within the set time period

Question 11

Which of the following is true of liquidation of a corporation?

Accepted Answer

A) Liquidated assets are used first to pay contract rights of shareholders. 
B) Common stock has a priority over stock with a liquidation preference. 
C) Voluntary liquidation is carried out by the corporate officers. 
D) A court-appointed receiver may conduct involuntary liquidation. 
A) Liquidated assets are used first to pay contract rights of shareholders. 
B) Common stock has a priority over stock with a liquidation preference. 
C) Voluntary liquidation is carried out by the corporate officers. 
D) A court-appointed receiver may conduct involuntary liquidation.

Question 12

Larson & Son manufactured welders that frequently malfunctioned, setting clothing on fire and causing serious burns.Larson & Son sold all of its assets to Swenson Co., which continued to manufacture the Larson welder product line.Eighteen months after Swenson's purchase, one of Larson's customers sued Swenson for injuries caused by a welder purchased from Larson, one year prior to the purchase by Swenson.Under the circumstances, Swenson Co.:

Accepted Answer

A) cannot be held liable, because it is a corporation. 
B) cannot be held liable, because it did not manufacture the welder in question. 
C) might be held liable for this debt in some states under strict tort liability. 
D) could not be liable if Larson & Son still existed as a corporate entity. 
A) cannot be held liable, because it is a corporation. 
B) cannot be held liable, because it did not manufacture the welder in question. 
C) might be held liable for this debt in some states under strict tort liability. 
D) could not be liable if Larson & Son still existed as a corporate entity.

Question 13

If Sean, a shareholder, dissents to a corporate merger, his appraisal remedies will be:

Accepted Answer

A) fair value of his shares as of the day the corporation agrees to purchase the shares. 
B) fair value of the shares as of the time immediately before the action to which he objects is taken. 
C) average purchase price for the shares during the preceding 30 days. 
D) None of these. 
A) fair value of his shares as of the day the corporation agrees to purchase the shares. 
B) fair value of the shares as of the time immediately before the action to which he objects is taken. 
C) average purchase price for the shares during the preceding 30 days. 
D) None of these.

Question 14

A dissenting shareholder can stop a merger or consolidation.

Accepted Answer

A) True 
 B)False

Question 15

The Revised Act grants dissenters' rights to:

Accepted Answer

A) a shareholder when any amendment to the articles of incorporation materially and adversely affects that dissenter's rights regarding his shares. 
B) dissenting shareholders of a corporation leasing substantially all of its assets in the usual course of business. 
C) dissenting shareholders of each corporate party to a short-form merger. 
D) All of these. 
A) a shareholder when any amendment to the articles of incorporation materially and adversely affects that dissenter's rights regarding his shares. 
B) dissenting shareholders of a corporation leasing substantially all of its assets in the usual course of business. 
C) dissenting shareholders of each corporate party to a short-form merger. 
D) All of these.

Question 16

The RMBCA provides what period of time within which an otherwise barred claim may be enforced for a claimant who did not receive notice of dissolution and liquidation?

Accepted Answer

A) Six months 
B) One year 
C) Three years 
D) Five years 
A) Six months 
B) One year 
C) Three years 
D) Five years

Question 17

The RMBCA (without the 1999 amendments) grants dissenters' rights to all but which of the following?

Accepted Answer

A) Dissenting shareholders to any plan of compulsory share exchange in which their corporation is the one to be acquired 
B) Dissenting shareholders to any amendment to the articles of incorporation that materially and adversely affects the dissenters' rights regarding their shares 
C) Dissenting shareholders of each corporate party to a merger, other than a short-form merger, where only the dissenting shareholders of the subsidiary have dissenters' rights 
D) Dissenters' rights exist under the RMBCA in all of these situations. 
A) Dissenting shareholders to any plan of compulsory share exchange in which their corporation is the one to be acquired 
B) Dissenting shareholders to any amendment to the articles of incorporation that materially and adversely affects the dissenters' rights regarding their shares 
C) Dissenting shareholders of each corporate party to a merger, other than a short-form merger, where only the dissenting shareholders of the subsidiary have dissenters' rights 
D) Dissenters' rights exist under the RMBCA in all of these situations.

Question 18

A corporation that buys the assets of another corporation does not assume the other's liability unless the:

Accepted Answer

A) purchaser, expressly or impliedly, agrees to assume the seller's liabilities. 
B) transaction amounts to a consolidation or merger of the two corporations. 
C) sale is for the fraudulent purpose of avoiding the liabilities of the seller. 
D) All of these. 
A) purchaser, expressly or impliedly, agrees to assume the seller's liabilities. 
B) transaction amounts to a consolidation or merger of the two corporations. 
C) sale is for the fraudulent purpose of avoiding the liabilities of the seller. 
D) All of these.

Question 19

The Revised Act permits the board of directors to adopt certain amendments without shareholder action.These amendments would include:

Accepted Answer

A) extending the duration of the corporation if it was incorporated when limited duration was required by law. 
B) changing each issued and unissued authorized share of an outstanding class into a greater number of whole shares if the corporation has only one class of shares. 
C) making minor name changes. 
D) All of these. 
A) extending the duration of the corporation if it was incorporated when limited duration was required by law. 
B) changing each issued and unissued authorized share of an outstanding class into a greater number of whole shares if the corporation has only one class of shares. 
C) making minor name changes. 
D) All of these.

Question 20

Under the CFPA of 2010, publicly held companies must, on their proxy solicitations, disclose and provide shareholders with a binding vote to approve any type of compensation based on or relating to mergers, consolidations, or the proposed sale of all of the assets of the company.

Accepted Answer

A) True 
 B)False

Exam 36: Fundamental Changes

The consolidation of AB Corporation and ZX Corporation requires the affirmative majority vote of:

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

Dissolution of a corporation does not terminate its existence and does not require that it liquidate its assets.

Brown Corporation purchased all of the stock of Grey Corporation.The appraisal remedy is not available to a dissenting shareholder of Brown Corporation.

Which of the following is NOT a basis for involuntary dissolution?

Which of the following is a prerequisite for requesting appraisal rights?

A creditor may petition the court to judicially dissolve a corporation if he has an unsatisfied judgment against the corporation and:

In many states, dissolution that is nonjudicial may be brought about when:

The Action Corporation and the Braker Corporation combine into the Action Corporation.This is a consolidation.

If a shareholder dissents to a proposed business combination, he is entitled to receive the fair value of his shares.In order to do so, the shareholder must do which of the following?

Which of the following is true of liquidation of a corporation?

If Sean, a shareholder, dissents to a corporate merger, his appraisal remedies will be:

A dissenting shareholder can stop a merger or consolidation.

The Revised Act grants dissenters' rights to:

The RMBCA provides what period of time within which an otherwise barred claim may be enforced for a claimant who did not receive notice of dissolution and liquidation?

The RMBCA (without the 1999 amendments) grants dissenters' rights to all but which of the following?

A corporation that buys the assets of another corporation does not assume the other's liability unless the:

The Revised Act permits the board of directors to adopt certain amendments without shareholder action.These amendments would include:

Under the CFPA of 2010, publicly held companies must, on their proxy solicitations, disclose and provide shareholders with a binding vote to approve any type of compensation based on or relating to mergers, consolidations, or the proposed sale of all of the assets of the company.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.

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