Exam 37: Fundamental Changes of Corporations

The court in the case of Alpert v.28 Williams St.Corp.found that causing the removal of minority shareholders through a freeze-out merger is justified if the action advances a general corporate interest.

The Revised Act takes the position that consolidations are now the most prevalent form of combination.

Which of the following is NOT a basis for involuntary dissolution?

Minority shareholders of N Corporation dissent to the corporation's merger with J Corporation.If the appraisal remedy is granted, the shareholders will be paid the:

MATCHING Part VII Matching Match each statement with the correct term below.a.One whose profits must be used exclusively for charitable, educational, or scientific purposes.b.One created under the laws of a given state.c.One created under the laws of any other state or jurisdiction.d.Person who takes the preliminary steps to organize a corporation.e.Person who agrees to purchase stock in a corporation.f.Rules governing a corporation's internal management.g.One formed in substantial compliance with the incorporation statute and the required organizational procedure.h.One not formed in compliance with the statute but recognized for most purposes as a corporation.i.Prevents a person from raising the question of a corporation's existence.j.One created to administer a unit of local civil government.k.Contractual right to purchase from a corporation shares of a specified class or classes.l.Source of capital creating no ownership interest and involving the corporation's promise to repay funds loaned to it.m.A type of debt security.n.Unsecured bonds; have only the obligation of the corporation behind them.o.Condition the payment of interest to some extent on corporate earnings.p.Bonds subject to redemption.q.Eligible corporation electing under the Internal Revenue Code to be taxed as a partnership.r.Shares are owned by large number of people and are widely traded.s.May be exchanged for other securities.t.Claims against a corporation's general assets and also a lien on specific property.u.Basic organizational document of a corporation; charter.v.Shares reacquired by a corporation.w.Opportunity to purchase a pro rata share of new stock offerings.x.Source of capital creating an ownership interest in the corporation.y.A corporation's exercise of the right to repurchase its own shares. -debt security

The right of dissent results in payment of:

MATCHING Part VII Matching Match each statement with the correct term below.a.One whose profits must be used exclusively for charitable, educational, or scientific purposes.b.One created under the laws of a given state.c.One created under the laws of any other state or jurisdiction.d.Person who takes the preliminary steps to organize a corporation.e.Person who agrees to purchase stock in a corporation.f.Rules governing a corporation's internal management.g.One formed in substantial compliance with the incorporation statute and the required organizational procedure.h.One not formed in compliance with the statute but recognized for most purposes as a corporation.i.Prevents a person from raising the question of a corporation's existence.j.One created to administer a unit of local civil government.k.Contractual right to purchase from a corporation shares of a specified class or classes.l.Source of capital creating no ownership interest and involving the corporation's promise to repay funds loaned to it.m.A type of debt security.n.Unsecured bonds; have only the obligation of the corporation behind them.o.Condition the payment of interest to some extent on corporate earnings.p.Bonds subject to redemption.q.Eligible corporation electing under the Internal Revenue Code to be taxed as a partnership.r.Shares are owned by large number of people and are widely traded.s.May be exchanged for other securities.t.Claims against a corporation's general assets and also a lien on specific property.u.Basic organizational document of a corporation; charter.v.Shares reacquired by a corporation.w.Opportunity to purchase a pro rata share of new stock offerings.x.Source of capital creating an ownership interest in the corporation.y.A corporation's exercise of the right to repurchase its own shares. -Subchapter S

A merger of Parker Corporation with Jones Corporation that results in only Parker Corporation's surviving normally would require approval of:

MATCHING Part VII Matching Match each statement with the correct term below.a.One whose profits must be used exclusively for charitable, educational, or scientific purposes.b.One created under the laws of a given state.c.One created under the laws of any other state or jurisdiction.d.Person who takes the preliminary steps to organize a corporation.e.Person who agrees to purchase stock in a corporation.f.Rules governing a corporation's internal management.g.One formed in substantial compliance with the incorporation statute and the required organizational procedure.h.One not formed in compliance with the statute but recognized for most purposes as a corporation.i.Prevents a person from raising the question of a corporation's existence.j.One created to administer a unit of local civil government.k.Contractual right to purchase from a corporation shares of a specified class or classes.l.Source of capital creating no ownership interest and involving the corporation's promise to repay funds loaned to it.m.A type of debt security.n.Unsecured bonds; have only the obligation of the corporation behind them.o.Condition the payment of interest to some extent on corporate earnings.p.Bonds subject to redemption.q.Eligible corporation electing under the Internal Revenue Code to be taxed as a partnership.r.Shares are owned by large number of people and are widely traded.s.May be exchanged for other securities.t.Claims against a corporation's general assets and also a lien on specific property.u.Basic organizational document of a corporation; charter.v.Shares reacquired by a corporation.w.Opportunity to purchase a pro rata share of new stock offerings.x.Source of capital creating an ownership interest in the corporation.y.A corporation's exercise of the right to repurchase its own shares. -stock options

The concept of a combination that makes a publicly held corporation a private one and includes cash-out contributions and management buyouts is a:

Incorporation statutes usually provide for both voluntary and involuntary dissolution of a corporation.

Match each statement with the correct term below.a.Each shareholder having one vote for each share owned; directors elected by a plurality of votes.b.Authorization to vote another's shares at a shareholder meeting.c.Right of a dissenter to receive fair value of his shares.d.Alter a corporation's basic structure; charter amendments, mergers, dissolution.e.Entitles each shareholder to give one candidate as many votes as the number of directors to be elected multiplied by the number of shares owned.f.Minimum number necessary to be present at a meeting in order to transact business.g.Brought by shareholder on behalf of the corporation to enforce a right belonging to the corporation.h.Brought by a shareholder against the corporation based upon his ownership of shares.i.Permission under the Revised Act for a corporation to change its state of incorporation.j.Fiduciary obligation of faithfulness; subordination of self-interest.k.Device designed to concentrate corporate control in one or more persons by transferring voting rights to them.l.The combination of assets of two or more corporations into one of the corporations.m.Permission under the Revised Act for a business entity to change its form to another type of entity.n.Precludes imposing liability on directors and officers for honest mistakes in judgment if they act in good faith with due care.o.A general invitation to all the shareholders of a target company to sell their shares at a specified price. -straight voting

MATCHING Part VII Matching Match each statement with the correct term below.a.One whose profits must be used exclusively for charitable, educational, or scientific purposes.b.One created under the laws of a given state.c.One created under the laws of any other state or jurisdiction.d.Person who takes the preliminary steps to organize a corporation.e.Person who agrees to purchase stock in a corporation.f.Rules governing a corporation's internal management.g.One formed in substantial compliance with the incorporation statute and the required organizational procedure.h.One not formed in compliance with the statute but recognized for most purposes as a corporation.i.Prevents a person from raising the question of a corporation's existence.j.One created to administer a unit of local civil government.k.Contractual right to purchase from a corporation shares of a specified class or classes.l.Source of capital creating no ownership interest and involving the corporation's promise to repay funds loaned to it.m.A type of debt security.n.Unsecured bonds; have only the obligation of the corporation behind them.o.Condition the payment of interest to some extent on corporate earnings.p.Bonds subject to redemption.q.Eligible corporation electing under the Internal Revenue Code to be taxed as a partnership.r.Shares are owned by large number of people and are widely traded.s.May be exchanged for other securities.t.Claims against a corporation's general assets and also a lien on specific property.u.Basic organizational document of a corporation; charter.v.Shares reacquired by a corporation.w.Opportunity to purchase a pro rata share of new stock offerings.x.Source of capital creating an ownership interest in the corporation.y.A corporation's exercise of the right to repurchase its own shares. -preemptive right

The use of cash-out combinations has raised questions concerning both their purpose and their fairness to minority shareholders.

A "short-form merger" requires shareholder approval of both corporations.

MATCHING Part VII Matching Match each statement with the correct term below.a.One whose profits must be used exclusively for charitable, educational, or scientific purposes.b.One created under the laws of a given state.c.One created under the laws of any other state or jurisdiction.d.Person who takes the preliminary steps to organize a corporation.e.Person who agrees to purchase stock in a corporation.f.Rules governing a corporation's internal management.g.One formed in substantial compliance with the incorporation statute and the required organizational procedure.h.One not formed in compliance with the statute but recognized for most purposes as a corporation.i.Prevents a person from raising the question of a corporation's existence.j.One created to administer a unit of local civil government.k.Contractual right to purchase from a corporation shares of a specified class or classes.l.Source of capital creating no ownership interest and involving the corporation's promise to repay funds loaned to it.m.A type of debt security.n.Unsecured bonds; have only the obligation of the corporation behind them.o.Condition the payment of interest to some extent on corporate earnings.p.Bonds subject to redemption.q.Eligible corporation electing under the Internal Revenue Code to be taxed as a partnership.r.Shares are owned by large number of people and are widely traded.s.May be exchanged for other securities.t.Claims against a corporation's general assets and also a lien on specific property.u.Basic organizational document of a corporation; charter.v.Shares reacquired by a corporation.w.Opportunity to purchase a pro rata share of new stock offerings.x.Source of capital creating an ownership interest in the corporation.y.A corporation's exercise of the right to repurchase its own shares. -treasury stock

MATCHING Part VII Matching Match each statement with the correct term below.a.One whose profits must be used exclusively for charitable, educational, or scientific purposes.b.One created under the laws of a given state.c.One created under the laws of any other state or jurisdiction.d.Person who takes the preliminary steps to organize a corporation.e.Person who agrees to purchase stock in a corporation.f.Rules governing a corporation's internal management.g.One formed in substantial compliance with the incorporation statute and the required organizational procedure.h.One not formed in compliance with the statute but recognized for most purposes as a corporation.i.Prevents a person from raising the question of a corporation's existence.j.One created to administer a unit of local civil government.k.Contractual right to purchase from a corporation shares of a specified class or classes.l.Source of capital creating no ownership interest and involving the corporation's promise to repay funds loaned to it.m.A type of debt security.n.Unsecured bonds; have only the obligation of the corporation behind them.o.Condition the payment of interest to some extent on corporate earnings.p.Bonds subject to redemption.q.Eligible corporation electing under the Internal Revenue Code to be taxed as a partnership.r.Shares are owned by large number of people and are widely traded.s.May be exchanged for other securities.t.Claims against a corporation's general assets and also a lien on specific property.u.Basic organizational document of a corporation; charter.v.Shares reacquired by a corporation.w.Opportunity to purchase a pro rata share of new stock offerings.x.Source of capital creating an ownership interest in the corporation.y.A corporation's exercise of the right to repurchase its own shares. -publicly held corporation

Match each statement with the correct term below.a.Each shareholder having one vote for each share owned; directors elected by a plurality of votes.b.Authorization to vote another's shares at a shareholder meeting.c.Right of a dissenter to receive fair value of his shares.d.Alter a corporation's basic structure; charter amendments, mergers, dissolution.e.Entitles each shareholder to give one candidate as many votes as the number of directors to be elected multiplied by the number of shares owned.f.Minimum number necessary to be present at a meeting in order to transact business.g.Brought by shareholder on behalf of the corporation to enforce a right belonging to the corporation.h.Brought by a shareholder against the corporation based upon his ownership of shares.i.Permission under the Revised Act for a corporation to change its state of incorporation.j.Fiduciary obligation of faithfulness; subordination of self-interest.k.Device designed to concentrate corporate control in one or more persons by transferring voting rights to them.l.The combination of assets of two or more corporations into one of the corporations.m.Permission under the Revised Act for a business entity to change its form to another type of entity.n.Precludes imposing liability on directors and officers for honest mistakes in judgment if they act in good faith with due care.o.A general invitation to all the shareholders of a target company to sell their shares at a specified price. -domestication

A __________ is a general invitation to all of the shareholders of a target company to sell their shares for a specified price.

Most states grant dissenters' rights: