Exam 47: Management of Corporations

To prevent conflicts of interest and covert compensation schemes, the Sarbanes-Oxley Act prohibits all loans either directly or indirectly to directors and executive officers by their corporations.

A corporation itself may be convicted of a criminal offense if its agent committed the offense acting within the scope of the agent's authority.

According to the RMBCA, shareholders may, by majority vote, remove a director with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

Under the doctrine of ______, a corporation is ______ to third persons for the tortious acts of its officers, employees, and agents to the same extent that a natural person is liable for the acts of agents and employees.

If an officer diverts a corporate opportunity, the corporation may recover from the officer:

The notice of a special meeting of shareholders must include a statement of the nature of the business to be transacted and no other business may be transacted at such a meeting.

Many states stipulate that there shall be no fewer than three directors for each corporation.

The courts have traditionally viewed it as their responsibility to sit in judgment of decisions made by corporate directors.

Which of the following is an incorrect statement about directors?

Action taken by shareholders without holding a meeting is valid under the RMBCA if it is evidenced by a written consent signed by all the shareholders entitled to vote on the action.

The means by which stockholders may seek to protect themselves against corporate actions to which they object include all of the following except: ______.

In dealing with the corporation, directors act in a fiduciary capacity.

A corporate officer, while still employed by his or her firm, may be in breach of the officer's fiduciary duty of __________ by recruiting key management employees to join a competing company.