Exam 36: Management Structure of Corporations

Shareholders normally have the right to do all but which one of the following?

If Marge, a vice president, made a contract on behalf of Barker Corporation when it was not within her authority, she is liable if she negligently exceeded her authority.

Special state statutes to accommodate the needs of closely held corporations:

With respect to the voting rights of shareholders, unless the articles of incorporation provide otherwise, a shareholder is entitled to:

Only the board of directors may approve fundamental changes in the corporation.

The role of shareholders in managing the corporation is generally restricted to:

Most states, as well as the Revised Act, hold that the test for the duty of diligence requires a director or officer to discharge corporate duties:

The officers and the directors are fiduciaries of the corporation, but the business judgment rule may preclude liability on officers and directors for honest mistakes of judgment.

Assuming no special provision in the articles of incorporation, special shareholder meetings may be called by:

The minimum number of board members necessary to be present at a meeting in order to transact business is known as:

The issuance of favorably priced shares to management while excluding other shareholders normally will constitute a violation of the fiduciary duty.

Which of the following is not imposed by the business judgment rule regarding the liability of officers and directors?

The Statutory Close Corporation Supplement has relaxed most of the non-essential corporate formalities.

One of the fiduciary duties of directors is the duty not to compete with the corporation.They may pursue their own business interest, but in doing so they may not:

The statutory model of corporate management required by most states accurately describes the actual governance of the great majority of corporations.

In the absence of a specific agreement, shares of stock are not freely transferable.

While officers, as agents of a corporation, owe an agent's duty of obedience, diligence, and loyalty to the corporation, this is not true of directors.

Virtually all shareholders who vote for directors do so through the use of a proxy.

Ace Corporation requires a quorum of five directors.If Richard, a director, shows up at the meeting for a vote on his favorite topic (dividends) and withdraws thereafter, leaving only four directors, they may not act on any further business.

With respect to the board of directors of a corporation, which of the following is NOT correct?