Exam 37: Corporate Formation and Financing

A corporate officer is liable to the corporation or its shareholders for a bad business decision.

To prevent a majority shareholder from dominating the management and operation of a close corporation, the firm should

When directors do not act in the best interests of their corporations, the shareholders may sue them on the company's behalf.

Corporate resolutions of the corporation's board of directors provide guidelines but cannot grant or restrict corporate powers.

Rex forms Shell Company to assume debts that he does not wish to pay. The firm is not intended to make a profit, and Rex does not provide it with sufficient capital. This most likely warrants

The primary document needed to incorporate a business is

If a director commits a breach of fiduciary duty, the shareholders have the inherent power to remove the director from office by a majority vote.

A benefit corporation is designed to make a profit and thereby provide long-term shareholder benefit.

Robotics Inc. is a corporation. Its express powers can be found in

How many directors serve on a corporation's board can be set forth in the corporation's bylaws.

Metro Moving Service holds itself out to customers as being a corporation but makes no attempt to incorporate. In this circumstance, the outfit is most likely

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

Because of officers' positions within the corporation, they can be held liable for negligence if their failure to exercise due care results in harm to the firm.

Betsy is a director of ChemCo Inc. Because of this position, she becomes involved in litigation. With respect to the costs, fees, and damages involved, she has a right to

Gaye is Hot Java Company's majority shareholder. Gaye decides to sell her Hot Java stock. The sale will be an effective transfer of the control of the company. Does Gaye owe a duty to Hot Java or its minority shareholders in this situation?

A corporate director may not

Dhani, Ezra, and Finn are the first directors on the board of Global Shipping Corporation. Subsequent directors will be elected by a majority vote of Global's

Corporate officers do not act as agents of the corporation.

Limited liability business forms, such as LLCs, LPs, and LLPs, offer tax advantages that are similar to those offered by

A foreign corporation that has not obtained a certificate of authority to do business in a state can nevertheless maintain an action in the state's courts.