Question 1

Cumulative voting:

Accepted Answer

A)  decreases the voting power of minority shareholders. 
B)  is the normal method for shareholder voting on corporate matters. 
C)  generally is required or allowed in the election of corporate directors. 
D)  is a right given to participating preferred shareholders. 
A)  decreases the voting power of minority shareholders. 
B)  is the normal method for shareholder voting on corporate matters. 
C)  generally is required or allowed in the election of corporate directors. 
D)  is a right given to participating preferred shareholders.

Question 2

As an owner of the corporation,a shareholder always has the right to inspect the books of the corporation for any purpose,regardless of whether the inspection is related to the shareholder's interest as a shareholder.

Accepted Answer

A) True 
 B)False

Question 3

Pursuant to the __________ theory,when a corporation is so dominated and controlled by shareholders,officers,and/or directors that the separate personalities of the individuals and the corporation no longer exist and there is a wrongful use of that control,the courts will disregard the corporate entity so as not to sanction a fraud or injustice.

Accepted Answer

A)  alter ego 
B)  altered states 
C)  puppeteer 
D)  invisible hand 
A)  alter ego 
B)  altered states 
C)  puppeteer 
D)  invisible hand

Question 4

A shareholder has a right to inspect the books of the shareholder's corporation if:

Accepted Answer

A)  the request is made in good faith. 
B)  the request is made with proper motives. 
C)  the inspection takes place at a reasonable time and place. 
D)  all of the above. 
A)  the request is made in good faith. 
B)  the request is made with proper motives. 
C)  the inspection takes place at a reasonable time and place. 
D)  all of the above.

Question 5

A shareholder has:

Accepted Answer

A)  an absolute right to dividends. 
B)  a right to dividends when declared. 
C)  a right to insist that dividends be declared. 
D)  to share equally all dividends with fellow shareholders. 
A)  an absolute right to dividends. 
B)  a right to dividends when declared. 
C)  a right to insist that dividends be declared. 
D)  to share equally all dividends with fellow shareholders.

Question 6

A bona fide purchaser of stock is shielded from the claim that the transfer was made in violation of a transfer restriction that was unknown to the purchaser and that was not noted conspicuously on the certificate.

Accepted Answer

A) True 
 B)False

Question 7

Dividends are payable in:

Accepted Answer

A)  money. 
B)  products manufactured by the corporation. 
C)  shares of other corporations held by the corporation. 
D)  all of the above. 
A)  money. 
B)  products manufactured by the corporation. 
C)  shares of other corporations held by the corporation. 
D)  all of the above.

Question 8

Straight voting:

Accepted Answer

A)  increases the voting power of minority shareholders. 
B)  is the normal method for shareholder voting on corporate matters. 
C)  restricts each shareholder to one vote,regardless of the number of shares owned. 
D)  all of the above. 
A)  increases the voting power of minority shareholders. 
B)  is the normal method for shareholder voting on corporate matters. 
C)  restricts each shareholder to one vote,regardless of the number of shares owned. 
D)  all of the above.

Question 9

A shareholder may make an absolute transfer of stock or may transfer it merely as collateral to secure the payment of a debt.

Accepted Answer

A) True 
 B)False

Question 10

Ordinarily,each shareholder is entitled to one vote for each voting share.

Accepted Answer

A) True 
 B)False

Question 11

A shareholder can give a proxy to vote shares only to another shareholder.

Accepted Answer

A) True 
 B)False

Question 12

To correctly transfer shares of stock,a delivery from the owner of the shares directly to the transferee is required.

Accepted Answer

A) True 
 B)False

Question 13

No writing is required for a contract by which a broker agrees with a customer to buy or sell securities for the customer.

Accepted Answer

A) True 
 B)False

Question 14

Shares of stock may be acquired through subscription or through a transfer of existing shares from a shareholder or from the corporation.

Accepted Answer

A) True 
 B)False

Question 15

An interest in a corporation is based on the ownership of one or more shares of stock of the corporation.

Accepted Answer

A) True 
 B)False

Question 16

When the corporation has the right to sue its directors,officers,or third persons for damages caused by them to the corporation or for breach of contract,one (1)or more shareholders may bring such action if the corporation refuses to do so.This is known as a __________ action.

Accepted Answer

A)  primary 
B)  derivative 
C)  deferential 
D)  preemptive 
A)  primary 
B)  derivative 
C)  deferential 
D)  preemptive

Question 17

A bond:

Accepted Answer

A)  that is unsecured is called a debenture bond. 
B)  is a negotiable security 
C)  generally has a life of five years or longer. 
D)  all of the above. 
A)  that is unsecured is called a debenture bond. 
B)  is a negotiable security 
C)  generally has a life of five years or longer. 
D)  all of the above.

Question 18

A shareholder does not:

Accepted Answer

A)  qualify as a member of the corporation. 
B)  own any specific property of the corporation. 
C)  have a fractional interest in the total property of the corporation. 
D)  all of the above. 
A)  qualify as a member of the corporation. 
B)  own any specific property of the corporation. 
C)  have a fractional interest in the total property of the corporation. 
D)  all of the above.

Question 19

Shareholders exercise direct control over their corporation.

Accepted Answer

A) True 
 B)False

Question 20

Corporate securities evidenced by a certificate are negotiable.

Accepted Answer

A) True 
 B)False

Exam 45: Shareholder Rights in Corporations

Cumulative voting:

As an owner of the corporation,a shareholder always has the right to inspect the books of the corporation for any purpose,regardless of whether the inspection is related to the shareholder's interest as a shareholder.

A shareholder has a right to inspect the books of the shareholder's corporation if:

A shareholder has:

A bona fide purchaser of stock is shielded from the claim that the transfer was made in violation of a transfer restriction that was unknown to the purchaser and that was not noted conspicuously on the certificate.

Dividends are payable in:

Straight voting:

A shareholder may make an absolute transfer of stock or may transfer it merely as collateral to secure the payment of a debt.

Ordinarily,each shareholder is entitled to one vote for each voting share.

A shareholder can give a proxy to vote shares only to another shareholder.

To correctly transfer shares of stock,a delivery from the owner of the shares directly to the transferee is required.

No writing is required for a contract by which a broker agrees with a customer to buy or sell securities for the customer.

Shares of stock may be acquired through subscription or through a transfer of existing shares from a shareholder or from the corporation.

An interest in a corporation is based on the ownership of one or more shares of stock of the corporation.

When the corporation has the right to sue its directors,officers,or third persons for damages caused by them to the corporation or for breach of contract,one (1)or more shareholders may bring such action if the corporation refuses to do so.This is known as a __________ action.

A bond:

A shareholder does not:

Shareholders exercise direct control over their corporation.

Corporate securities evidenced by a certificate are negotiable.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Instruments, parties, and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor-Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters