Question 1

For shareholders to act during a meeting, a proxy must be presented.

Accepted Answer

A) True 
 B)False

Question 2

Fact Pattern 29-1 Don is a shareholder of Energy Renew Inc. When the directors fail to undertake an action to redress a wrong suffered by the firm, Don files a suit on its behalf.
Refer to Fact Pattern 29-1. Any damages recovered by the suit will go to the firm's

Accepted Answer

A)  shareholders, excluding Don. 
B)  treasury. 
C)  directors. 
D)  shareholders, including Don. 
A)  shareholders, excluding Don. 
B)  treasury. 
C)  directors. 
D)  shareholders, including Don.

Question 3

Tech Talent Inc. is a corporation. Its implied powers enable it to

Accepted Answer

A)  avoid paying income taxes on foreign income. 
B)  depart significantly from traditional corporate formalities. 
C)  act beyond the authority given to it under its charter. 
D)  borrow funds, lend funds, and extend credit. 
A)  avoid paying income taxes on foreign income. 
B)  depart significantly from traditional corporate formalities. 
C)  act beyond the authority given to it under its charter. 
D)  borrow funds, lend funds, and extend credit.

Question 4

Adam is a shareholder of Bay Boats Inc. with preemptive rights. With these rights, he can

Accepted Answer

A)  buy a prorated share of a new issue of stock before other buyers. 
B)  choose to have the firm act exclusively in a certain area. 
C)  preempt managerial decisions that affect shareholders. 
D)  sell a prorated share of a new issue of stock before other sellers. 
A)  buy a prorated share of a new issue of stock before other buyers. 
B)  choose to have the firm act exclusively in a certain area. 
C)  preempt managerial decisions that affect shareholders. 
D)  sell a prorated share of a new issue of stock before other sellers.

Question 5

The acquisition of a share of stock makes a person a shareholder, but not an owner, of a corporation.

Accepted Answer

A) True 
 B)False

Question 6

A benefit corporation is designed to make a profit and maximize the benefit to shareholders.

Accepted Answer

A) True 
 B)False

Question 7

Fact Pattern 29-1 Don is a shareholder of Energy Renew Inc. When the directors fail to undertake an action to redress a wrong suffered by the firm, Don files a suit on its behalf.
Refer to Fact Pattern 29-1. Don's suit is

Accepted Answer

A)  a preemptive right. 
B)  a shareholder's derivative suit. 
C)  the duty of a majority shareholder. 
D)  unethical and illegal. 
A)  a preemptive right. 
B)  a shareholder's derivative suit. 
C)  the duty of a majority shareholder. 
D)  unethical and illegal.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Harry and Ilene want to market a new line of camping gear as a corporation-Journeys Inc. To avoid income taxes at the corporate level, they should form

Accepted Answer

A)  an alien corporation. 
B)  a foreign corporation. 
C)  an S corporation. 
D)  a benefit corporation. 
A)  an alien corporation. 
B)  a foreign corporation. 
C)  an S corporation. 
D)  a benefit corporation.

Question 10

Brad is a shareholder of Cloud Servers Inc. He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to

Accepted Answer

A)  assert a preemptive right. 
B)  bring a shareholder's derivative suit. 
C)  exercise actual control over the corporation. 
D)  participate in a cumulative vote. 
A)  assert a preemptive right. 
B)  bring a shareholder's derivative suit. 
C)  exercise actual control over the corporation. 
D)  participate in a cumulative vote.

Question 11

A breach of fiduciary duties by those who own a close corporation normally constitutes what is known as oppressive conduct.

Accepted Answer

A) True 
 B)False

Question 12

If the procedures for incorporation are not followed precisely , others may be able to challenge the existence of the corporation.

Accepted Answer

A) True 
 B)False

Exam 29: Formation and Ownership of a Corporation

For shareholders to act during a meeting, a proxy must be presented.

Fact Pattern 29-1 Don is a shareholder of Energy Renew Inc. When the directors fail to undertake an action to redress a wrong suffered by the firm, Don files a suit on its behalf. Refer to Fact Pattern 29-1. Any damages recovered by the suit will go to the firm's

Tech Talent Inc. is a corporation. Its implied powers enable it to

Adam is a shareholder of Bay Boats Inc. with preemptive rights. With these rights, he can

The acquisition of a share of stock makes a person a shareholder, but not an owner, of a corporation.

A benefit corporation is designed to make a profit and maximize the benefit to shareholders.

Fact Pattern 29-1 Don is a shareholder of Energy Renew Inc. When the directors fail to undertake an action to redress a wrong suffered by the firm, Don files a suit on its behalf. Refer to Fact Pattern 29-1. Don's suit is

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

Harry and Ilene want to market a new line of camping gear as a corporation-Journeys Inc. To avoid income taxes at the corporate level, they should form

Brad is a shareholder of Cloud Servers Inc. He will be deemed to have a fiduciary duty to Cloud and its minority shareholders if he has a sufficient number of shares to

A breach of fiduciary duties by those who own a close corporation normally constitutes what is known as oppressive conduct.

If the procedures for incorporation are not followed precisely , others may be able to challenge the existence of the corporation.

Introduction to the Law

Ethics in Business

The Courts and Our Legal System

Constitutional Law

Business Torts

Intellectual Property

Business Crimes

Introduction to Contracts

Offer and Acceptance

Consideration

Capacity

The Legality of Agreements

Voluntary Consent

Written Contracts

Third Party Rights

Termination and Remedies

Introduction to Sales and Lease Contracts

Title and Risk of Loss

Performance and Breach

Warranties and Product Liability

Consumer Protection

The Essentials of Negotiability

Negotiable Instruments: Transfer and Liability

Banking in the Digital Age

Agency Relationships

Employment, Immigration, and Labor Law

Employment Discrimination

Types of Business Organizations

Management of a Corporation

Combining and Dissolving a Corporation

Credit and Security

Mortgages

Bankruptcy

Insurance

Personal Property

Bailments

Real Property

Landlord and Tenant Law

Wills and Trusts

Administrative Law

Antitrust Law

International and Space Law

Filters