Question 1

What duty to directors owe to creditors?

Accepted Answer

A director owes a duty of care

Question 2

What happens if annual returns are not filed for a corporation?

Accepted Answer

A certificate of dis

Question 3

Contrast the obligations and duties of directors and shareholders of a corporation.

Accepted Answer

Basically, the shareholders of a corpora

Question 4

What have been the three distinct methods that are used for the creation of small companies and corporations in Canada?

Accepted Answer

Letters patent, regi

Question 5

Where a corporation borrows money, only the corporation is responsible for that debt, not the shareholders.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following situations would allow a shareholder of a closely held corporation, with permission of the court, to sue on behalf of the corporation?

Accepted Answer

A)  If four of the five directors, in the best interests of the corporation, voted against the fifth director, voted to end the employment contract of the fifth director, and voted not to buy his shares. 
B)  If the corporation had been wronged by the negligent and fraudulent acts of one of its directors, but the corporation refused to take any action against the wrongdoer. 
C)  If the shareholders refused to enter into a shareholder's agreement. 
D)  If the directors refused to declare a dividend. 
E)  If the directors solicited proxies from all of the shareholders. 
A)  If four of the five directors, in the best interests of the corporation, voted against the fifth director, voted to end the employment contract of the fifth director, and voted not to buy his shares. 
B)  If the corporation had been wronged by the negligent and fraudulent acts of one of its directors, but the corporation refused to take any action against the wrongdoer. 
C)  If the shareholders refused to enter into a shareholder's agreement. 
D)  If the directors refused to declare a dividend. 
E)  If the directors solicited proxies from all of the shareholders.

Question 7

Explain under what circumstances a shareholder will not be permitted to sell his shares.

Accepted Answer

Closely held corporations usua

Question 8

When a closely held corporation is involved, it is common to include no restrictions on the transfer or sale of the shares.

Accepted Answer

A) True 
 B)False

Question 9

Explain under what circumstances a shareholder's right to dissent arises.

Accepted Answer

A shareholder's right to dissent arises

Question 10

A prospectus is an internal document detailing the expected performance of a corporation.

Accepted Answer

A) True 
 B)False

Question 11

Where pre-emptive rights exist, existing shareholders must be offered their proportionate share of any new allotment of shares before the shares are offered to anyone else.

Accepted Answer

A) True 
 B)False

Question 12

Directors owe a fiduciary duty to the public.

Accepted Answer

A) True 
 B)False

Question 13

Discuss the concept of promoters, their duties, and their role in the corporate form.

Accepted Answer

A promoter is a person who participates

Question 14

Distinguish between a bond and a share.

Accepted Answer

A share involves a shareholder who has a

Question 15

Distinguish between selling the assets of a corporation and selling its shares.

Accepted Answer

If its shares are sold, the corporation

Question 16

Punam was the director of a broadly held corporation that made educational software. Without the knowledge or consent of the board of directors, Punam started a competing business that she ran from home. Which of the following is true?

Accepted Answer

A)  Punam has breached a fiduciary duty owed to the corporation. 
B)  Punam is only a director, so she owes no special duty to the corporation. 
C)  Punam can compete with the business, as long as she doesn't use confidential documents belonging to the corporation. 
D)  Punam owes the shareholders of the corporation a fiduciary duty, so they could sue her if they suffer a loss. 
E)  Whether or not Punam can compete with the business depends on whether her written contract prohibits it. 
A)  Punam has breached a fiduciary duty owed to the corporation. 
B)  Punam is only a director, so she owes no special duty to the corporation. 
C)  Punam can compete with the business, as long as she doesn't use confidential documents belonging to the corporation. 
D)  Punam owes the shareholders of the corporation a fiduciary duty, so they could sue her if they suffer a loss. 
E)  Whether or not Punam can compete with the business depends on whether her written contract prohibits it.

Question 17

Jed Wimsey, in auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought improper. Which of the following practices he found would be a breach of fiduciary duty?

Accepted Answer

A)  A partner of a firm that sold hospital supplies had, without the knowledge or consent of his partners, started a competing business that he ran from his own home. 
B)  A director of a corporation profited $25,000 from a contract between the corporation and sellers of some property in which the director had an interest, after the director made full disclosure of his interest to the board of directors and abstained from the vote. 
C)  The directors or a corporation failed to declare a dividend for the fourth year in a row. 
D)  An officer of a corporation took advantage of an opportunity he learned about as an officer of the corporation, but took steps to determine that the corporation was not interested in it and received permission to do so from the board of directors. 
E)  A shareholder belongs to a group that directly opposes the policy of the corporation with regard to its logging and mining operations. 
A)  A partner of a firm that sold hospital supplies had, without the knowledge or consent of his partners, started a competing business that he ran from his own home. 
B)  A director of a corporation profited $25,000 from a contract between the corporation and sellers of some property in which the director had an interest, after the director made full disclosure of his interest to the board of directors and abstained from the vote. 
C)  The directors or a corporation failed to declare a dividend for the fourth year in a row. 
D)  An officer of a corporation took advantage of an opportunity he learned about as an officer of the corporation, but took steps to determine that the corporation was not interested in it and received permission to do so from the board of directors. 
E)  A shareholder belongs to a group that directly opposes the policy of the corporation with regard to its logging and mining operations.

Question 18

When a personal guarantee has been signed by a shareholder, the creditor can demand payment from that shareholder despite the separate legal entity nature of the corporation.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements about pre-incorporation contracts is False?

Accepted Answer

A)  Promoters will often purchase property on behalf of a corporation prior to incorporation and then have the corporation ratify after incorporation has taken place. 
B)  Ratification of pre-incorporation contracts is invalid at common law, since the corporation did not exist at the time the contract was made. 
C)  Many jurisdictions have made legislative changes permitting later-incorporated corporations to ratify pre-incorporation contracts. 
D)  If a corporation does not ratify a pre-incorporation contract, or if a pre-incorporation contract is signed in a jurisdiction which does not permit ratification, the promoter remains solely liable for any losses. 
E)  Promoters cannot be held liable for losses due to the doctrine of corporate myth. 
A)  Promoters will often purchase property on behalf of a corporation prior to incorporation and then have the corporation ratify after incorporation has taken place. 
B)  Ratification of pre-incorporation contracts is invalid at common law, since the corporation did not exist at the time the contract was made. 
C)  Many jurisdictions have made legislative changes permitting later-incorporated corporations to ratify pre-incorporation contracts. 
D)  If a corporation does not ratify a pre-incorporation contract, or if a pre-incorporation contract is signed in a jurisdiction which does not permit ratification, the promoter remains solely liable for any losses. 
E)  Promoters cannot be held liable for losses due to the doctrine of corporate myth.

Question 20

Explain the nature of the "corporate myth."

Accepted Answer

This refers to the i

What duty to directors owe to creditors?

What happens if annual returns are not filed for a corporation?

Contrast the obligations and duties of directors and shareholders of a corporation.

What have been the three distinct methods that are used for the creation of small companies and corporations in Canada?

Where a corporation borrows money, only the corporation is responsible for that debt, not the shareholders.

Which of the following situations would allow a shareholder of a closely held corporation, with permission of the court, to sue on behalf of the corporation?

Explain under what circumstances a shareholder will not be permitted to sell his shares.

When a closely held corporation is involved, it is common to include no restrictions on the transfer or sale of the shares.

Explain under what circumstances a shareholder's right to dissent arises.

A prospectus is an internal document detailing the expected performance of a corporation.

Where pre-emptive rights exist, existing shareholders must be offered their proportionate share of any new allotment of shares before the shares are offered to anyone else.

Directors owe a fiduciary duty to the public.

Discuss the concept of promoters, their duties, and their role in the corporate form.

Distinguish between a bond and a share.

Distinguish between selling the assets of a corporation and selling its shares.

Punam was the director of a broadly held corporation that made educational software. Without the knowledge or consent of the board of directors, Punam started a competing business that she ran from home. Which of the following is true?

Jed Wimsey, in auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought improper. Which of the following practices he found would be a breach of fiduciary duty?

When a personal guarantee has been signed by a shareholder, the creditor can demand payment from that shareholder despite the separate legal entity nature of the corporation.

Which of the following statements about pre-incorporation contracts is False?

Explain the nature of the "corporate myth."

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Agency and Partnership

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters

Exam 11: Corporations

What duty to directors owe to creditors?

What happens if annual returns are not filed for a corporation?

Contrast the obligations and duties of directors and shareholders of a corporation.

What have been the three distinct methods that are used for the creation of small companies and corporations in Canada?

Where a corporation borrows money, only the corporation is responsible for that debt, not the shareholders.

Which of the following situations would allow a shareholder of a closely held corporation, with permission of the court, to sue on behalf of the corporation?

Explain under what circumstances a shareholder will not be permitted to sell his shares.

When a closely held corporation is involved, it is common to include no restrictions on the transfer or sale of the shares.

Explain under what circumstances a shareholder's right to dissent arises.

A prospectus is an internal document detailing the expected performance of a corporation.

Where pre-emptive rights exist, existing shareholders must be offered their proportionate share of any new allotment of shares before the shares are offered to anyone else.

Directors owe a fiduciary duty to the public.

Discuss the concept of promoters, their duties, and their role in the corporate form.

Distinguish between a bond and a share.

Distinguish between selling the assets of a corporation and selling its shares.

Punam was the director of a broadly held corporation that made educational software. Without the knowledge or consent of the board of directors, Punam started a competing business that she ran from home. Which of the following is true?

Jed Wimsey, in auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought improper. Which of the following practices he found would be a breach of fiduciary duty?

When a personal guarantee has been signed by a shareholder, the creditor can demand payment from that shareholder despite the separate legal entity nature of the corporation.

Which of the following statements about pre-incorporation contracts is False?

Explain the nature of the "corporate myth."

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Agency and Partnership

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters