Question 1

If the board delegates to a committee its duty to select a new company president:

Accepted Answer

A) the members of that committee may be responsible individuals other than board members. 
B) the committee must be approved by the shareholders. 
C) the non-committee directors are relieved of liability for acts of the committee. 
D) the committee may exercise all the authority of the board. 
E) the committee must consist of board members and may be authorized unless otherwise provided by the articles of incorporation or bylaws. 
A) the members of that committee may be responsible individuals other than board members. 
B) the committee must be approved by the shareholders. 
C) the non-committee directors are relieved of liability for acts of the committee. 
D) the committee may exercise all the authority of the board. 
E) the committee must consist of board members and may be authorized unless otherwise provided by the articles of incorporation or bylaws. E

Question 2

Special shareholder meetings may be called by:

Accepted Answer

A) the board of directors. 
B) holders of at least 10% of shares. 
C) Both (a) and (b). 
D) Neither (a) nor (b). 
A) the board of directors. 
B) holders of at least 10% of shares. 
C) Both (a) and (b). 
D) Neither (a) nor (b). C

Question 3

The board of directors appoints the officers of the corporation.

Accepted Answer

A) True 
 B)False  True

Question 4

Together Maynard, Armstrong, Starnes, Tidmore, and Collazos own 51 percent of the shares of Gibson, Inc.Under either straight or cumulative voting, if they vote for the same people, they can always elect the entire board of directors.

Accepted Answer

A) True 
 B)False

Question 5

As the shareholders' elected representatives, the board of directors are delegated the power to direct the business of the corporation.

Accepted Answer

A) True 
 B)False

Question 6

The 2002 Sarbanes-Oxley Act created a five-person Accounting Oversight Board with authority to review and discipline auditors.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) 10 
B) 33 1/3 
C) 66 
D) 50 
A) 10 
B) 33 1/3 
C) 66 
D) 50

Question 8

If shareholders agree in writing to vote in a specified manner for election or removal of directors, this is known as:

Accepted Answer

A) a proxy. 
B) cumulative voting. 
C) a voting trust. 
D) a shareholder voting agreement. 
A) a proxy. 
B) cumulative voting. 
C) a voting trust. 
D) a shareholder voting agreement.

Question 9

A quorum will consist of one-half of shares entitled to vote if there are no provisions for any other number in the articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 10

The board of directors has the power to:

Accepted Answer

A) sell corporate assets in the usual and regular course of business. 
B) issue notes or bonds. 
C) fix the selling price of publicly traded shares of the corporation's stock. 
D) All of the above. 
E) Both (a) and (b). 
A) sell corporate assets in the usual and regular course of business. 
B) issue notes or bonds. 
C) fix the selling price of publicly traded shares of the corporation's stock. 
D) All of the above. 
E) Both (a) and (b).

Question 11

How does the management structure of a closely held corporation differ from that of a publicly traded corporation?

Accepted Answer

a.Yes.The officers and directors have vi

Question 12

The business judgment rule would require an officer or director to use the highest duty of care in the execution of his office.

Accepted Answer

A) True 
 B)False

Question 13

In most states, a corporation may, with shareholder approval, limit the liability of directors for some breaches of the duties which they owe to the corporation.

Accepted Answer

A) True 
 B)False

Question 14

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:

Accepted Answer

A) the amount of any financial benefit the director receives to which he is not entitled, such as a bribe, kickback, or profits from a usurped corporate opportunity. 
B) an intentional infliction of harm on the corporation or the shareholders. 
C) liability under Section 8.33 for unlawful distributions. 
D) an intentional violation of the criminal law. 
E) All of the above. 
A) the amount of any financial benefit the director receives to which he is not entitled, such as a bribe, kickback, or profits from a usurped corporate opportunity. 
B) an intentional infliction of harm on the corporation or the shareholders. 
C) liability under Section 8.33 for unlawful distributions. 
D) an intentional violation of the criminal law. 
E) All of the above.

Question 15

Which of the following is/are director(s) in publicly held corporations?

Accepted Answer

A) Inside. 
B) Outside. 
C) Unaffiliated. 
D) Affiliated. 
E) Any of the above. 
A) Inside. 
B) Outside. 
C) Unaffiliated. 
D) Affiliated. 
E) Any of the above.

Question 16

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)?

Accepted Answer

A) 45,001 
B) 37,501 
C) 30,001 
D) 50,001 
A) 45,001 
B) 37,501 
C) 30,001 
D) 50,001

Question 17

The Revised Act requires that demand be made upon the board of directors to enforce the corporate right at issue as a prerequisite to bringing a derivative suit.

Accepted Answer

A) True 
 B)False

Question 18

Voting trusts generally are effective for one year.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 36: Management Structure of Corporations

If the board delegates to a committee its duty to select a new company president:

Special shareholder meetings may be called by:

The board of directors appoints the officers of the corporation.

Together Maynard, Armstrong, Starnes, Tidmore, and Collazos own 51 percent of the shares of Gibson, Inc.Under either straight or cumulative voting, if they vote for the same people, they can always elect the entire board of directors.

As the shareholders' elected representatives, the board of directors are delegated the power to direct the business of the corporation.

The 2002 Sarbanes-Oxley Act created a five-person Accounting Oversight Board with authority to review and discipline auditors.

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

If shareholders agree in writing to vote in a specified manner for election or removal of directors, this is known as:

A quorum will consist of one-half of shares entitled to vote if there are no provisions for any other number in the articles of incorporation.

The board of directors has the power to:

How does the management structure of a closely held corporation differ from that of a publicly traded corporation?

The business judgment rule would require an officer or director to use the highest duty of care in the execution of his office.

In most states, a corporation may, with shareholder approval, limit the liability of directors for some breaches of the duties which they owe to the corporation.

Which of the following is/are director(s) in publicly held corporations?

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)?

The Revised Act requires that demand be made upon the board of directors to enforce the corporate right at issue as a prerequisite to bringing a derivative suit.

Voting trusts generally are effective for one year.

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

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

Introduction to Law

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Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

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Nature and Formation of Corporations

Financial Structure of Corporations

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