Exam 37: Fundamental Changes of 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. -subscriber

If Sean, a shareholder, dissents to a corporate merger, his appraisal remedies will be:

Any method of combination of corporations that involves issuing shares, proxy solicitations, or tender offers may be subject to federal securities regulation.

The statutory provisions governing dissolution and liquidation usually prescribe procedures to safeguard the interests of the corporation's creditors.These procedures include:

The board approves a proposed amendment to deny existing preemptive rights to Class A preferred, and to issue stock in a new Class D preferred that would be accorded liquidation preference after all other classes of preferred stock.Preferred Classes B and C would remain the same.Which of the following would be true?

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. -quorum

A dissenting shareholder who complies with all applicable requirements is entitled to an appraisal remedy.

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. -business judgment rule

A court may dissolve a corporation in a proceeding brought by a shareholder when:

If Corporation J and Corporation K combine all of their assets and create a consolidated corporation, Corporation J and Corporation K will cease to exist.

Statutory provisions do not protect creditors upon the dissolution of a corporation.

Larson & Son manufactured welders that frequently malfunctioned, setting clothing on fire and causing serious burns.Larson & Son sold all of its assets to Swenson Co., which continued to manufacture the Larson welder product line.Eighteen months after Swenson's purchase, one of Larson's customers sued Swenson for injuries caused by a welder purchased from Larson, one year prior to the purchase by Swenson.Under the circumstances, Swenson Co.:

The combination of two or more corporations into a new corporation is known as:

The use of cash-out combinations has raised questions concerning both their purpose and their fairness to minority shareholders.In this context, fairness includes:

AB Corporation consolidates with ZX Corporation to form A-Z Corporation.The debts of AB Corporation are:

The court in the Cohen v.Mirage Resorts, Inc.case stated:

Match each statement with the correct term below.a.An association of two or more persons to carry on as co-owners a business for profit.b.Unincorporated business association composed of persons who combine their resources to carry out a particular business enterprise, usually of short duration, for profit.c.An unincorporated organization of two or more persons doing business in a state other than the one in which it was formed.d.Total money and property contributed by the partners for use by the partnership; represents the partners' equity in the partnership.e.Duty of utmost loyalty, fairness, and good faith owed by partners to each other and to the partnership.f.Duty owed by partners to manage the partnership affairs without gross negligence, reckless conduct, intentional misconduct, or knowing violation of the law.g.Imposes partnership duties and liabilities on a non-partner who has either represented himself or consented to be represented as a partner.h.Any partner's ceasing to be associated with the carrying on of the business.i.Judicial lien that may be obtained against a partner's transferable interest in a partnership.j.Completing unfinished business, collecting debts, and distributing assets to contributors and partners; also called liquidation.k.A situation in which the RUPA requires a partnership to wind up and terminate; under the UPA, a change in the relation of partners caused by any partner's ceasing to be associated in the carrying on of the business.l.A general partnership that, by making a statutorily required filing, limits liability of its partners.m.A partnership formed by two or more persons under the laws of a state and having one or more general partners and one or more limited partners.n.An unincorporated business organization, created under state statute, that provides limited liability to all of its owners and permits all of its members to participate in management.o.Right of one person to choose her business partners. -limited partnership

Match each statement with the correct term below.a.An association of two or more persons to carry on as co-owners a business for profit.b.Unincorporated business association composed of persons who combine their resources to carry out a particular business enterprise, usually of short duration, for profit.c.An unincorporated organization of two or more persons doing business in a state other than the one in which it was formed.d.Total money and property contributed by the partners for use by the partnership; represents the partners' equity in the partnership.e.Duty of utmost loyalty, fairness, and good faith owed by partners to each other and to the partnership.f.Duty owed by partners to manage the partnership affairs without gross negligence, reckless conduct, intentional misconduct, or knowing violation of the law.g.Imposes partnership duties and liabilities on a non-partner who has either represented himself or consented to be represented as a partner.h.Any partner's ceasing to be associated with the carrying on of the business.i.Judicial lien that may be obtained against a partner's transferable interest in a partnership.j.Completing unfinished business, collecting debts, and distributing assets to contributors and partners; also called liquidation.k.A situation in which the RUPA requires a partnership to wind up and terminate; under the UPA, a change in the relation of partners caused by any partner's ceasing to be associated in the carrying on of the business.l.A general partnership that, by making a statutorily required filing, limits liability of its partners.m.A partnership formed by two or more persons under the laws of a state and having one or more general partners and one or more limited partners.n.An unincorporated business organization, created under state statute, that provides limited liability to all of its owners and permits all of its members to participate in management.o.Right of one person to choose her business partners. -dissolution

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. -debentures

If the sale of substantially all of a corporation's assets takes place in the usual and regular course of business, approval by neither the board nor shareholders is required.