Question 1

A significant change to U.S.financial regulation occurred with the 2010 Congressional enactment, the:

Accepted Answer

A) Sarbanes-Oxley Act. 
B) Wall Street Reform and Consumer Protection Act. 
C) RMBCA. 
D) Statutory Close Corporation Supplement. 
A) Sarbanes-Oxley Act. 
B) Wall Street Reform and Consumer Protection Act. 
C) RMBCA. 
D) Statutory Close Corporation Supplement.

Question 2

Directors usually may vote by proxy when they are not able to be present for a meeting.

Accepted Answer

A) True 
 B)False

Question 3

Currently, Julia is vice president of Speller Corporation.Under the Revised Act, Julia will not be permitted to also hold the office of treasurer.

Accepted Answer

A) True 
 B)False

Question 4

With respect to the voting rights of shareholders, a shareholder is entitled to vote:

Accepted Answer

A) only at annual shareholder meetings. 
B) one vote for every two shares of stock owned. 
C) only in person. 
D) at annual and special shareholder meetings, ordinarily with one vote for each share owned. 
A) only at annual shareholder meetings. 
B) one vote for every two shares of stock owned. 
C) only in person. 
D) at annual and special shareholder meetings, ordinarily with one vote for each share owned.

Question 5

Which of the following is the effect of the business judgment rule regarding the liability of officers and directors?

Accepted Answer

A) Courts will not substitute their judgment for that of the board or an officer acting in good faith with due care. 
B) Officers and directors will never have liability for their decisions relating to the corporation. 
C) Officers and directors may have liability for bad faith decisions, but cannot be liable for failure to act. 
D) Directors and officers will not be held liable for conduct that is only negligent. 
A) Courts will not substitute their judgment for that of the board or an officer acting in good faith with due care. 
B) Officers and directors will never have liability for their decisions relating to the corporation. 
C) Officers and directors may have liability for bad faith decisions, but cannot be liable for failure to act. 
D) Directors and officers will not be held liable for conduct that is only negligent.

Question 6

An officer who breaches the fiduciary duty to the corporation will be:

Accepted Answer

A) discharged, but not required to pay anything. 
B) required to return to the corporation profits obtained through breach of a fiduciary duty and forfeit the right to compensation during the period of the breach 
C) required to pay back all compensation received during the period of the breach. 
D) None of these. 
A) discharged, but not required to pay anything. 
B) required to return to the corporation profits obtained through breach of a fiduciary duty and forfeit the right to compensation during the period of the breach 
C) required to pay back all compensation received during the period of the breach. 
D) None of these.

Question 7

The Revised Act states that "all corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of ":

Accepted Answer

A) the shareholders of the corporation. 
B) the chief executive officer of the corporation. 
C) the officers of the corporation. 
D) the board of directors of the corporation. 
A) the shareholders of the corporation. 
B) the chief executive officer of the corporation. 
C) the officers of the corporation. 
D) the board of directors of the corporation.

Question 8

Which of the following is correct regarding the removal of Mr.X from the board of XYZ?

Accepted Answer

A) The common law does not permit removal of a director for any reason. 
B) The RMBCA permits the removal of a director without cause. 
C) The articles of incorporation cannot provide for the removal of directors. 
D) Under common law and statutory law, a director can never be removed without cause. 
A) The common law does not permit removal of a director for any reason. 
B) The RMBCA permits the removal of a director without cause. 
C) The articles of incorporation cannot provide for the removal of directors. 
D) Under common law and statutory law, a director can never be removed without cause.

Question 9

Arthur is a shareholder of Sigma Corp.He has evidence to suggest that its president/CEO has allowed the corporation to engage in acts that are ultra vires.Based upon this evidence, Arthur contacts an attorney and sues the corporation on behalf of the corporation.The lawsuit Arthur has filed is known as a(n):

Accepted Answer

A) direct suit. 
B) derivative suit. 
C) class action suit. 
D) unauthorized suit. 
A) direct suit. 
B) derivative suit. 
C) class action suit. 
D) unauthorized suit.

Question 10

Jack has been on the board of his brother's company for three years but has never attended a board meeting.He may be liable for failing to act.

Accepted Answer

A) True 
 B)False

Question 11

The Statutory Close Corporation Supplement to the MBCA and RMBCA and special legislation in about twenty states accommodate the needs of closely held corporations by all but which of the following?

Accepted Answer

A) Permitting operation without a board of directors 
B) Authorizing the use of shareholder agreements in place of bylaws 
C) Requiring cumulative voting 
D) Making annual meetings optional 
A) Permitting operation without a board of directors 
B) Authorizing the use of shareholder agreements in place of bylaws 
C) Requiring cumulative voting 
D) Making annual meetings optional

Question 12

Closely held corporations sometimes impose supermajority or unanimous quorum requirements even though this creates the possibility of deadlock at the director level.

Accepted Answer

A) True 
 B)False

Question 13

Directors, but not officers, may compete with the corporation in their own private business dealings.

Accepted Answer

A) True 
 B)False

Question 14

Shares in a publicly held corporation typically are:

Accepted Answer

A) owned mostly by management of the corporation. 
B) widely dispersed and about two-thirds are held by institutional investors. 
C) owned by a few investors holding many shares each. 
D) owned mostly by individual investors, and these investors usually exercise their right to vote by attending shareholder meetings. 
A) owned mostly by management of the corporation. 
B) widely dispersed and about two-thirds are held by institutional investors. 
C) owned by a few investors holding many shares each. 
D) owned mostly by individual investors, and these investors usually exercise their right to vote by attending shareholder meetings.

Question 15

During the past twenty years or so, inside directors' number and influence in most large corporations have increased dramatically.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not true about a corporation's ratification of an officer's act?

Accepted Answer

A) It applies to an authorized act of an officer. 
B) It relates back to the original transaction. 
C) It may be either express or implied from the corporation's acceptance of contractual benefits. 
D) The corporation must have full knowledge of the facts in order to ratify the act. 
A) It applies to an authorized act of an officer. 
B) It relates back to the original transaction. 
C) It may be either express or implied from the corporation's acceptance of contractual benefits. 
D) The corporation must have full knowledge of the facts in order to ratify the act.

Question 17

In most states, a corporation may, with shareholder approval, limit the liability of directors for some breaches of the duties which they owe to the corporation.

Accepted Answer

A) True 
 B)False

Question 18

With respect to the board of directors of a corporation, which of the following is NOT correct?

Accepted Answer

A) They manage the business and affairs of the corporation. 
B) They are the shareholders' elected representatives. 
C) They must always obtain shareholder approval before deciding questions of operating policy. 
D) They have the authority to delegate power to officers and agents. 
A) They manage the business and affairs of the corporation. 
B) They are the shareholders' elected representatives. 
C) They must always obtain shareholder approval before deciding questions of operating policy. 
D) They have the authority to delegate power to officers and agents.

Question 19

Who usually determines the compensation of officers and directors? What are some of the executive compensations available?

Accepted Answer

The board of directors usually determine

Question 20

Determining the names of other shareholders in order to communicate with them about corporate affairs is a "proper purpose" for a shareholder to inspect the books and records of a corporation.

Accepted Answer

A) True 
 B)False

Exam 35: Management Structure

A significant change to U.S.financial regulation occurred with the 2010 Congressional enactment, the:

Directors usually may vote by proxy when they are not able to be present for a meeting.

Currently, Julia is vice president of Speller Corporation.Under the Revised Act, Julia will not be permitted to also hold the office of treasurer.

With respect to the voting rights of shareholders, a shareholder is entitled to vote:

Which of the following is the effect of the business judgment rule regarding the liability of officers and directors?

An officer who breaches the fiduciary duty to the corporation will be:

The Revised Act states that "all corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of ":

Which of the following is correct regarding the removal of Mr.X from the board of XYZ?

Jack has been on the board of his brother's company for three years but has never attended a board meeting.He may be liable for failing to act.

The Statutory Close Corporation Supplement to the MBCA and RMBCA and special legislation in about twenty states accommodate the needs of closely held corporations by all but which of the following?

Closely held corporations sometimes impose supermajority or unanimous quorum requirements even though this creates the possibility of deadlock at the director level.

Directors, but not officers, may compete with the corporation in their own private business dealings.

Shares in a publicly held corporation typically are:

During the past twenty years or so, inside directors' number and influence in most large corporations have increased dramatically.

Which of the following is not true about a corporation's ratification of an officer's act?

In most states, a corporation may, with shareholder approval, limit the liability of directors for some breaches of the duties which they owe to the corporation.

With respect to the board of directors of a corporation, which of the following is NOT correct?

Who usually determines the compensation of officers and directors? What are some of the executive compensations available?

Determining the names of other shareholders in order to communicate with them about corporate affairs is a "proper purpose" for a shareholder to inspect the books and records of a corporation.

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

Fundamental Changes

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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