Exam 35: Management Structure of Corporations

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.

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

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.

Voting trusts generally are effective for one year.

The Rutherford Corporation, a publicly held company, has employed Duncan, Saindon & Associates, PSC, as their accounting firm to perform audit services. Under the Sarbanes-Oxley Act, the lead auditor of Duncan, Saindon & Associates must rotate every:

The percentage of shares required for a quorum may vary from state to state and from company to company.

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.

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:

Tunso Corp. has 1,000 shares of stock outstanding that are permitted to vote for directors. If Tunso Corp. permits cumulative voting, a minority shareholder would need to vote how many shares to elect one of three directors?

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)?

Assume that 12,000 shares are represented at a shareholder meeting. How many votes are normally necessary to carry a motion?

In which of the following areas does the board determine corporate policy?

To protect a shareholder's interest in the corporation, the law provides shareholders with certain enforcement rights.

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

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

Unlike voting trusts, shareholder voting agreements are not limited in duration.

The directors of a corporation are expected to devote their full time to the corporation's affairs.

Under the MBCA, a quorum of shareholders at an annual meeting may be not less than what percentage of the shares entitled to vote?

Which of the following would be likely to result in liability to a director of a textile company?

The role of shareholders in managing the corporation is generally restricted to: