Question 1

The Statutory Close Corporation Supplement has relaxed most of the nonessential corporate formalities.

Accepted Answer

A) True 
 B)False

Question 2

A proxy is revocable to the same extent as an agency.

Accepted Answer

A) True 
 B)False

Question 3

Members of the board of directors may not determine their own compensation.

Accepted Answer

A) True 
 B)False

Question 4

Shareholders normally have the right to do all but which one of the following?

Accepted Answer

A)  Approve the sale of a major division. 
B)  Elect the officers. 
C)  Meet at least once a year. 
D)  Elect the directors. 
A)  Approve the sale of a major division. 
B)  Elect the officers. 
C)  Meet at least once a year. 
D)  Elect the directors.

Question 5

The board determines corporate policy in a number of areas, including:

Accepted Answer

A)  determining the corporation's capital structure. 
B)  initiating fundamental changes. 
C)  selecting and removing officers. 
D)  declaring dividends. 
E)  All of these. 
A)  determining the corporation's capital structure. 
B)  initiating fundamental changes. 
C)  selecting and removing officers. 
D)  declaring dividends. 
E)  All of these.

Question 6

Assuming no special provision in the articles of incorporation, special shareholder meetings may be called by:

Accepted Answer

A)  the president of the company. 
B)  any individual director. 
C)  any individual shareholder. 
D)  holders of at least 10% of shares. 
A)  the president of the company. 
B)  any individual director. 
C)  any individual shareholder. 
D)  holders of at least 10% of shares.

Question 7

As the shareholders' elected representatives, the board of directors are delegated the power to direct the business of the corporation.

Accepted Answer

A) True 
 B)False

Question 8

Zeelon Corporation stock may be summarized as follows:
100,000 authorized
90,000 issued
75,000 outstanding
15,000 treasury stock
How many shares or proxies will have to be present for a quorum (assuming no special provision and that the Revised Act is not in effect)?

Accepted Answer

A)  50,001 
B)  30,001 
C)  37,501 
D)  45,001 
A)  50,001 
B)  30,001 
C)  37,501 
D)  45,001

Question 9

The RMBCA 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, its:

Accepted Answer

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

Question 10

Compare the respective roles of the officers, board of directors, and the shareholders of a corporation.Who runs the corporation? Explain your answer and give examples.

Accepted Answer

The officers of a corporation handle the

Question 11

The __________ precludes imposing liability on directors and officers for honest mistakes in judgment if they act with due care, in good faith, and in a manner reasonably believed to be in the best interests of the corporation.

Accepted Answer

A)  business judgment rule. 
B)  duty of diligence. 
C)  duty of obedience. 
D)  None of these is correct. 
A)  business judgment rule. 
B)  duty of diligence. 
C)  duty of obedience. 
D)  None of these is correct.

Question 12

The Revised Act authorizes the articles of incorporation to include a provision eliminating or limiting, with certain exceptions, the liability of a director to the corporation or its shareholders for any action he takes, or fails to take, as director.These limitations or exceptions, for which liability would not be affected, include:

Accepted Answer

A)  the amount of any financial benefit the director receives to which he is not entitled, such as a bribe, kickback, or profits from a usurped corporate opportunity. 
B)  an intentional violation of the criminal law. 
C)  liability under Section 8.33 for unlawful distributions. 
D)  an intentional infliction of harm on the corporation or the shareholders. 
E)  All of these are correct. 
A)  the amount of any financial benefit the director receives to which he is not entitled, such as a bribe, kickback, or profits from a usurped corporate opportunity. 
B)  an intentional violation of the criminal law. 
C)  liability under Section 8.33 for unlawful distributions. 
D)  an intentional infliction of harm on the corporation or the shareholders. 
E)  All of these are correct.

Question 13

Assume there are no provisions in the corporation's articles of incorporation or bylaws regarding quorum requirements.If there are 13 total directors of General Grain Corporation and the minimum number of directors are present to transact business, how many votes normally would be necessary for those present to act as a board?

Accepted Answer

A)  7 
B)  11 
C)  4 
D)  6 
A)  7 
B)  11 
C)  4 
D)  6

Question 14

One of the fiduciary duties of directors is the duty not to compete with the corporation.They may pursue their own business interest, but they may not:

Accepted Answer

A)  use corporate facilities to do so. 
B)  hire away personnel for their own business. 
C)  use corporate resources do do so. 
D)  All of the answer choices are correct. 
A)  use corporate facilities to do so. 
B)  hire away personnel for their own business. 
C)  use corporate resources do do so. 
D)  All of the answer choices are correct.

Question 15

A shareholder may bring a direct suit to enforce a claim that she has against the corporation, based on her ownership of shares.

Accepted Answer

A) True 
 B)False

Question 16

Voting trusts generally are effective for one year.

Accepted Answer

A) True 
 B)False

Question 17

Claude is a shareholder in the Tel Ko Corporation.He learns of insider trading by one of the directors and wants to sue the corporation on behalf of the corporation and its shareholders.A shareholder cannot sue the corporation to enforce a right belonging to the corporation.

Accepted Answer

A) True 
 B)False

Question 18

If Marilyn and George form a corporation under the Revised Act with Marilyn as president and George as treasurer, Marilyn cannot also be corporate secretary.

Accepted Answer

A) True 
 B)False

Question 19

a.What is a quorum of the board of directors for purpose of conducting corporate business? What does the Revised Act say with regard to a quorum? What is a supermajority requirement? 
b.The directors of Bigkey, Inc.can't decide whether to declare a dividend, so the board appoints a committee consisting of the president of the corporation, the vice president of the corporation, and the treasurer to decide whether to pay a dividend.If the committee wants to declare a dividend, the directors say the officers can pay it immediately before the next board meeting.Is this a permissible delegation of corporate authority? Explain.

Accepted Answer

a.A quorum is the minimum number require

Question 20

According to the amendments to the Revised Act from 2014 and 2016, corporations may include in their articles of incorporation a provision that allows a director or an officer to chose to not present a business opportunity to the corporation.

Accepted Answer

A) True 
 B)False

Exam 35: Management Structure of Corporations

The Statutory Close Corporation Supplement has relaxed most of the nonessential corporate formalities.

A proxy is revocable to the same extent as an agency.

Members of the board of directors may not determine their own compensation.

Shareholders normally have the right to do all but which one of the following?

The board determines corporate policy in a number of areas, including:

Assuming no special provision in the articles of incorporation, special shareholder meetings may be called by:

As the shareholders' elected representatives, the board of directors are delegated the power to direct the business of the corporation.

Zeelon Corporation stock may be summarized as follows: 100,000 authorized 90,000 issued 75,000 outstanding 15,000 treasury stock How many shares or proxies will have to be present for a quorum (assuming no special provision and that the Revised Act is not in effect)?

The RMBCA 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, its:

Compare the respective roles of the officers, board of directors, and the shareholders of a corporation.Who runs the corporation? Explain your answer and give examples.

The __________ precludes imposing liability on directors and officers for honest mistakes in judgment if they act with due care, in good faith, and in a manner reasonably believed to be in the best interests of the corporation.

One of the fiduciary duties of directors is the duty not to compete with the corporation.They may pursue their own business interest, but they may not:

A shareholder may bring a direct suit to enforce a claim that she has against the corporation, based on her ownership of shares.

Voting trusts generally are effective for one year.

Claude is a shareholder in the Tel Ko Corporation.He learns of insider trading by one of the directors and wants to sue the corporation on behalf of the corporation and its shareholders.A shareholder cannot sue the corporation to enforce a right belonging to the corporation.

If Marilyn and George form a corporation under the Revised Act with Marilyn as president and George as treasurer, Marilyn cannot also be corporate secretary.

According to the amendments to the Revised Act from 2014 and 2016, corporations may include in their articles of incorporation a provision that allows a director or an officer to chose to not present a business opportunity to the corporation.

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

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 Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

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

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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