Question 1

How is incorporation effected in a registration jurisdiction?

Accepted Answer

Memorandum of association and

Question 2

Mark wants to incorporate.Which one of the following statements is correct with regard to incorporating in Nova Scotia?

Accepted Answer

A)  Articles of incorporation is the document used to incorporate the company. 
B)  These are "letters patent" jurisdictions. 
C)  The documents to be sent to the registrar of companies are called the "memorandum" and the "articles." 
D)  The "objects" of the company must be set out in the charter document so that the shareholders understand the limits on the capacity of the corporation. 
E)  You can't incorporate a closely held company in these jurisdictions. 
A)  Articles of incorporation is the document used to incorporate the company. 
B)  These are "letters patent" jurisdictions. 
C)  The documents to be sent to the registrar of companies are called the "memorandum" and the "articles." 
D)  The "objects" of the company must be set out in the charter document so that the shareholders understand the limits on the capacity of the corporation. 
E)  You can't incorporate a closely held company in these jurisdictions.

Question 3

Shareholders do not owe a duty to the corporation.

Accepted Answer

A) True 
 B)False

Question 4

Joe is an environmental activist and he acquired shares in MacMillan Bloedel (a forestry corporation),only for the purpose of undermining MacMillan Bloedel,speaking against their practices at annual shareholders' meetings,and getting access to confidential information.Joe spoke against MacMillan Bloedel at every opportunity.Explain his legal obligations to the corporation under these circumstances.

Accepted Answer

He has none.As a sha

Question 5

Three classmates incorporated about a week after graduation.The authorized capital was 500 000 common no-par-value shares.Each took one share; each was a director.If the directors decide to issue more shares from the treasury to raise more capital,which of the following provisions ensures that they keep their proportionate holdings?

Accepted Answer

A)  pre-emptive right provision 
B)  indoor-management rule 
C)  derivative-action provision 
D)  dissent procedure 
E)  relief-from-oppression provision 
A)  pre-emptive right provision 
B)  indoor-management rule 
C)  derivative-action provision 
D)  dissent procedure 
E)  relief-from-oppression provision

Question 6

The corporation can also borrow funds,thus accumulating ___________.

Accepted Answer

A)  shares 
B)  debt 
C)  bonds 
D)  assets 
E)  trustees 
A)  shares 
B)  debt 
C)  bonds 
D)  assets 
E)  trustees

Question 7

Consider the decision in Agrium Inc.v.Hamilton.What did the Court find?

Accepted Answer

A)  Hamilton, as a director and majority shareholder of Flagstaff, was in a fiduciary relationship with Agrium, a minority shareholder. 
B)  Hamilton was liable for insider trading. 
C)  Hamilton, as a director and majority shareholder of Flagstaff, was not in a fiduciary relationship with Agrium, a minority shareholder. 
D)  Hamilton was liable for fraudulent misrepresentation. 
E)  Hamilton's action did not constitute oppressive conduct. 
A)  Hamilton, as a director and majority shareholder of Flagstaff, was in a fiduciary relationship with Agrium, a minority shareholder. 
B)  Hamilton was liable for insider trading. 
C)  Hamilton, as a director and majority shareholder of Flagstaff, was not in a fiduciary relationship with Agrium, a minority shareholder. 
D)  Hamilton was liable for fraudulent misrepresentation. 
E)  Hamilton's action did not constitute oppressive conduct.

Question 8

Under what circumstances will preferred shareholders of a corporation be allowed to vote?

Accepted Answer

Usually,only common shareholders have th

Question 9

Directors owe a fiduciary duty to the corporation.

Accepted Answer

A) True 
 B)False

Question 10

Read each of the following separately.In which one of the following cases would the corporation not be bound by the contract made?

Accepted Answer

A)  Jones, without the knowledge or authorization of Corporation A, approached one of their suppliers claiming to be an employee of Corporation A. He selected several valuable watches and took them with him, putting the bill on Corporation A's account. No one in Corporation A had ever heard of Jones before. 
B)  Contrary to company policy, Gore, the purchasing agent for the corporation, contracted for supplies by using the green form instead of using the blue form. 
C)  Brian, a purchasing agent for the corporation for ten years, was fired for just cause. The next day, he visited suppliers as usual and contracted for the corporation as usual. They had not been told that he had been fired. 
D)  Kim, an agent for a small closely held corporation which sold Canadian art, had authority to purchase some photographs of Clayoquot Sound, but instead she bought several oil paintings of the sea. When they were sent to the store, they were sold immediately. 
E)  A salesperson working for a corporation operating a car dealership sold a car and took a trade-in without first getting approval of the manager as required in his employment contract. 
A)  Jones, without the knowledge or authorization of Corporation A, approached one of their suppliers claiming to be an employee of Corporation A. He selected several valuable watches and took them with him, putting the bill on Corporation A's account. No one in Corporation A had ever heard of Jones before. 
B)  Contrary to company policy, Gore, the purchasing agent for the corporation, contracted for supplies by using the green form instead of using the blue form. 
C)  Brian, a purchasing agent for the corporation for ten years, was fired for just cause. The next day, he visited suppliers as usual and contracted for the corporation as usual. They had not been told that he had been fired. 
D)  Kim, an agent for a small closely held corporation which sold Canadian art, had authority to purchase some photographs of Clayoquot Sound, but instead she bought several oil paintings of the sea. When they were sent to the store, they were sold immediately. 
E)  A salesperson working for a corporation operating a car dealership sold a car and took a trade-in without first getting approval of the manager as required in his employment contract.

Question 11

The articles of incorporation jurisdictions (except British Columbia)have abolished ________.

Accepted Answer

A)  dividends 
B)  preferred shares 
C)  par-value shares 
D)  voting shares 
E)  promoters 
A)  dividends 
B)  preferred shares 
C)  par-value shares 
D)  voting shares 
E)  promoters

Question 12

Who is the party responsible for ensuring that financial statements for an organization are properly done?

Accepted Answer

The answer of Who is the party responsible for ensuring...

Question 13

Which of the following situations would allow a shareholder to sue on behalf of the corporation?

Accepted Answer

A)  If four of the five directors, in the best interests of the corporation, voted against the fifth as director, voted to end the employment contract of the fifth, and voted not to buy his shares. 
B)  If the corporation had been wronged (lost $30 000) by the negligent and fraudulent acts of one of its directors, but the corporation refused to make any action against the wrongdoer. 
C)  If the shareholders refused to enter into a shareholder's agreement. 
D)  If the directors took an action that unfairly prejudiced a shareholder. 
E)  If the directors issued shares without offering any of the new issue to the present shareholders. 
A)  If four of the five directors, in the best interests of the corporation, voted against the fifth as director, voted to end the employment contract of the fifth, and voted not to buy his shares. 
B)  If the corporation had been wronged (lost $30 000) by the negligent and fraudulent acts of one of its directors, but the corporation refused to make any action against the wrongdoer. 
C)  If the shareholders refused to enter into a shareholder's agreement. 
D)  If the directors took an action that unfairly prejudiced a shareholder. 
E)  If the directors issued shares without offering any of the new issue to the present shareholders.

Question 14

What is the purpose of a shareholder agreement?

Accepted Answer

To protect the right

Question 15

Which of the following is true with regard to the characteristics of corporations?

Accepted Answer

A)  The corporation is a separate legal person, but neither can sue nor be sued. 
B)  Directors are responsible for the shareholders of the corporation. 
C)  Shareholders, are liable for the debts and other obligations of the corporation. 
D)  A shareholder's liability is limited to the amount he or she paid for the shares. 
E)  The shareholders would be vicariously liable for any damage caused by a employee of the corporation carrying out his or her duties. 
A)  The corporation is a separate legal person, but neither can sue nor be sued. 
B)  Directors are responsible for the shareholders of the corporation. 
C)  Shareholders, are liable for the debts and other obligations of the corporation. 
D)  A shareholder's liability is limited to the amount he or she paid for the shares. 
E)  The shareholders would be vicariously liable for any damage caused by a employee of the corporation carrying out his or her duties.

Question 16

Which of the following is an advantage of incorporation?

Accepted Answer

A)  Shareholders are liable for debts of the corporation. 
B)  There are no tax advantages as compared to a sole proprietorship. 
C)  Shareholders can veto decisions of directors. 
D)  Shares are easily transferred. 
E)  Shareholders owe a duty to the corporation. 
A)  Shareholders are liable for debts of the corporation. 
B)  There are no tax advantages as compared to a sole proprietorship. 
C)  Shareholders can veto decisions of directors. 
D)  Shares are easily transferred. 
E)  Shareholders owe a duty to the corporation.

Question 17

It is common practice in Canada and the United States to put a value on the share,making it a par-value share.

Accepted Answer

A) True 
 B)False

Question 18

What are three distinct methods that are used for the creation of small corporations in Canada?

Accepted Answer

Letters patent,regis

Question 19

Lee,a former head of a venture capital firm,sat on the board of directors of Angel Enterprises Ltd.,a broadly held corporation.During a board meeting,she recommended that the corporation invest in a new technology startup.Lee failed to mention that she owned shares in this new tech company.When the prospect of investing was put to the board,Lee voted in favour it.Read each of the following statements separately,and choose the true statement.

Accepted Answer

A)  Lee must account for any profit made because she failed to disclose her interest and voted on the matter. 
B)  Lee does not have to disclose her interest in the contract, as long as her director's agreement relieves her of her fiduciary duties. 
C)  Lee must disclose her interest in a contract before the board, but she is entitled to vote for it. 
D)  Lee has breached her fiduciary duty, but she does not need to give up any profits, as long as the investment turns out to have been sound. 
E)  Lee does not owe a fiduciary obligation to the company, only to individual shareholders. 
A)  Lee must account for any profit made because she failed to disclose her interest and voted on the matter. 
B)  Lee does not have to disclose her interest in the contract, as long as her director's agreement relieves her of her fiduciary duties. 
C)  Lee must disclose her interest in a contract before the board, but she is entitled to vote for it. 
D)  Lee has breached her fiduciary duty, but she does not need to give up any profits, as long as the investment turns out to have been sound. 
E)  Lee does not owe a fiduciary obligation to the company, only to individual shareholders.

Question 20

What does it mean to be a closely held corporation?

Accepted Answer

In general,it is a corporation

How is incorporation effected in a registration jurisdiction?

Mark wants to incorporate.Which one of the following statements is correct with regard to incorporating in Nova Scotia?

Shareholders do not owe a duty to the corporation.

The corporation can also borrow funds,thus accumulating ___________.

Consider the decision in Agrium Inc.v.Hamilton.What did the Court find?

Under what circumstances will preferred shareholders of a corporation be allowed to vote?

Directors owe a fiduciary duty to the corporation.

Read each of the following separately.In which one of the following cases would the corporation not be bound by the contract made?

The articles of incorporation jurisdictions (except British Columbia)have abolished ________.

Who is the party responsible for ensuring that financial statements for an organization are properly done?

Which of the following situations would allow a shareholder to sue on behalf of the corporation?

What is the purpose of a shareholder agreement?

Which of the following is true with regard to the characteristics of corporations?

Which of the following is an advantage of incorporation?

It is common practice in Canada and the United States to put a value on the share,making it a par-value share.

What are three distinct methods that are used for the creation of small corporations in Canada?

What does it mean to be a closely held corporation?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputesthe Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contractconsensus and Consideration

The Elements of a Contract capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Employment

Agency and Partnership

Real, Personal, and Intellectual Property

Information Technology and the Internet

Sales and Consumer Protection

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Exam 12: Corporations

How is incorporation effected in a registration jurisdiction?

Mark wants to incorporate.Which one of the following statements is correct with regard to incorporating in Nova Scotia?

Shareholders do not owe a duty to the corporation.

The corporation can also borrow funds,thus accumulating ___________.

Consider the decision in Agrium Inc.v.Hamilton.What did the Court find?

Under what circumstances will preferred shareholders of a corporation be allowed to vote?

Directors owe a fiduciary duty to the corporation.

Read each of the following separately.In which one of the following cases would the corporation not be bound by the contract made?

The articles of incorporation jurisdictions (except British Columbia)have abolished ________.

Who is the party responsible for ensuring that financial statements for an organization are properly done?

Which of the following situations would allow a shareholder to sue on behalf of the corporation?

What is the purpose of a shareholder agreement?

Which of the following is true with regard to the characteristics of corporations?

Which of the following is an advantage of incorporation?

It is common practice in Canada and the United States to put a value on the share,making it a par-value share.

What are three distinct methods that are used for the creation of small corporations in Canada?

What does it mean to be a closely held corporation?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputesthe Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contractconsensus and Consideration

The Elements of a Contract capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Employment

Agency and Partnership

Real, Personal, and Intellectual Property

Information Technology and the Internet

Sales and Consumer Protection

Priority of Creditors

Filters