Exam 48: Management of Corporations

Ordinarily,action by shareholders has legal effect as a corporate act only if such action is taken at a regular or special meeting of the stockholders.

The Sarbanes-Oxley Act prohibits all corporate loans to directors and executive officers unless:

The powers of the officers of a corporation are controlled by the laws of agency.

Action taken by shareholders without holding a meeting is valid under the RMBCA if it is evidenced by a written consent signed by all the shareholders entitled to vote on the action.

In addition to the corporation itself,which of the following parties are ordinarily responsible for corporate debts?

Corporate officers may avail themselves of all business opportunities that come to them in an individual capacity regardless of whether or not the opportunity lies within their field of duty.

A board of directors' oversight responsibilities for its company's business affairs do not include evaluating management's performance.

Ordinarily,the management of a corporation is not liable to third persons if the managerial policies cause loss to such third persons.

The authority of corporate employees and other officers is generally limited to the duties of their offices.

A board of directors may enter into any contract or transaction necessary to carry out the business for which the corporation was formed.

The president of a business corporation does not have implied authority to execute commercial paper in the name of the corporation.

Officers that cause a corporation to break a contract with third party are liable to the third party even if they acted in good faith to advance the interests of the corporation.

Officers and directors are not personally responsible for crimes they have committed when it can be demonstrated that in carrying out such crimes,they acted on behalf of the corporation.