Exam 29: Corporations

Ernst is a director of Fine Art Dealers, Inc. Ernst is trained in art valuation. Fine Art makes several purchases in which it pays too much for artwork. Ernst approves all the transactions without reading the details. Ernst is most likely liable for breach of

Rob owns Solar Fuel Corporation. Rob uses Solar Fuel's funds to pay his personal expenses, creates Thermal Power Corporation to engage in the same business as Solar Fuel, transfers Solar Fuel's assets to Thermal Power, and petitions Solar Fuel into bankruptcy. This most likely warrants​

A receiver is always appointed by a court if the dissolution of a corporation is involuntary.

Holly is a director of International Gourmet Spices, Inc. As a director, with respect to the corporation, Holly is​

Guy is Hot Java Company's majority shareholder. Guy decides to sell his Hot Java stock. The sale will be an effective transfer of the control of the company. Does Guy owe a duty to Hot Java or its minority shareholders in this situation?​

There are no important consequences if the procedures for incorporation are not followed precisely.

A court will pierce the corporate veil of a corporation that is formed to accomplish an illegitimate objective.

Clive, Domina, and Elgar are the first directors on the board of Face x Face Corporation, a social media host. Subsequent directors are elected by a majority vote of Face x Face's​

If a corporation has S corporation status, it can avoid the imposition of income taxes at the corporate level.

The board of Management Consultants, Inc. (MCI), can delegate work to​

Wiley incorporates his business as Wiley Wire Corporation in Texas. He and his group of shareholders intend to make a profit from their sales of fencing wire. Wiley Wire Corporation is​

Fact Pattern 29-1 Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by SBC, Ray files a suit on the firm's behalf. -Refer to Fact Pattern 29-1. Any damages recovered by Ray's suit will go to

The ordinary rules of agency normally apply to the employment of corporate officers.

A straight majority vote of the shares represented at a shareholders' meeting is usually required to pass resolutions.

Dollars & Sense, Inc., is incorporated in the state of New Jersey and is doing business in the state of New York. In New York, Dollars & Sense is properly referred to as

Brandi is a shareholder of Cloud Servers & Routers Inc.. Brandi will be deemed to have a fiduciary duty to Cloud and its minority shareholders if she has a sufficient number of shares to​

Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is

One of the key advantages of the corporate form is the unlimited liability of its owners.

Nora is a director of Outback Outfitters, Inc. Under the standard of due care owed by directors of a corporation, Nora's decisions must be informed and​

A corporation possesses the same right of access to the courts as a natural person.