Exam 29: Corporations

To pierce the corporate veil means to shield the shareholders from personal liability.

A director must always vote on a proposed transaction in which he or she has a personal interest.

A new position on a board of directors can be created by an amendment to the articles of incorporation.

Firms are obligated to return a principal amount per share to each holder of common stock.

Shannon is an officer for Turista Shirts Corporation. Due to a bad business decision on Shannon's part, the company's sales decrease. Shannon is most likely liable for breach of​

Farrah and Grant are shareholders of Hong Kong Restaurants, Inc. As shareholders, they must approve​

Deepwater Dredging Company holds itself out to others as being a corporation but makes no attempt to incorporate. Estuary Marina signs a contract with Deepwater that is not performed. Estuary Marina files a suit against the firm. The court will likely hold that Deepwater is​

As a general rule, shareholders make daily business decisions for a corporation.

The incorporation of the town of Halfway, Oregon, is approved by the state. Halfway is​

Directors must refrain from self-dealing.

Shareholders can elect and remove the directors of the corporation.

State laws strictly prescribe quorum requirements in all jurisdictions.

The articles of incorporation serve as a primary source of authority for the corporation's future organization and business operations.

A court will not pierce the corporate veil of a corporation that is merely set up never to make a profit.

The corporation is a creature of the common law.

With preemptive rights, shareholders preempt the decisions of directors and officers with respect to corporate policy.

David wants to go into business as Explosive Bursts to make and market fireworks. When deciding which form of business organization would be most appropriate, David would normally take into account all of the following except

In some states, a director can be removed from a corporate board without cause.

For shareholders to act during a meeting, a quorum must be present.

Bret and Courtney form Delite Day Care, Inc. Ultimate responsibility for policy decisions necessary to the management of corporate affairs rests with Delite's​