Question 1

An officer or director's responsibility to exercise ordinary care and prudence in discharging duties is the:

Accepted Answer

A) duty of good faith. 
B) duty of diligence. 
C) fiduciary duty. 
D) duty of obedience. 
A) duty of good faith. 
B) duty of diligence. 
C) fiduciary duty. 
D) duty of obedience.

Question 2

While officers,as agents of a corporation,owe an agent's duty of obedience,diligence,and loyalty to the corporation,this is not true of directors.

Accepted Answer

A) True 
 B)False

Question 3

One of the fiduciary duties of directors is the duty not to compete with the corporation.They may pursue their own business interest,but they may not:

Accepted Answer

A) use corporate resources do do so. 
B) hire away personnel for their own business. 
C) use corporate facilities to do so. 
D) All of the answer choices are correct. 
A) use corporate resources do do so. 
B) hire away personnel for their own business. 
C) use corporate facilities to do so. 
D) All of the answer choices are correct.

Question 4

If Marge,a vice president,made a contract on behalf of Barker Corporation when it was not within her authority,she is liable if she negligently exceeded her authority.

Accepted Answer

A) True 
 B)False

Question 5

The directors of a corporation are expected to devote their full time to the corporation's affairs.

Accepted Answer

A) True 
 B)False

Question 6

Explain the reasons why the accountability of the management of a corporation is a cultural issue.

Accepted Answer

A relatively small number of large,publi

Question 7

Regarding the election of directors:

Accepted Answer

A) under the Revised Act, directors are elected by a majority of the votes. 
B) cumulative voting is a right of shareholders in all states. 
C) cumulative voting permits minority shareholders to obtain majority representation on the board. 
D) under straight voting, shareholders owning a majority of the voting shares can always elect the entire board of directors. 
A) under the Revised Act, directors are elected by a majority of the votes. 
B) cumulative voting is a right of shareholders in all states. 
C) cumulative voting permits minority shareholders to obtain majority representation on the board. 
D) under straight voting, shareholders owning a majority of the voting shares can always elect the entire board of directors.

Question 8

A quorum of shares must be present at the shareholders' meeting,either in person or by proxy,to make effective decisions.

Accepted Answer

A) True 
 B)False

Question 9

If Marilyn and George form a corporation under the Revised Act with Marilyn as president and George as treasurer,Marilyn cannot also be corporate secretary.

Accepted Answer

A) True 
 B)False

Question 10

The Revised Act requires that demand be made upon the board of directors to enforce the corporate right at issue as a prerequisite to bringing a derivative suit.

Accepted Answer

A) True 
 B)False

Question 11

What are some of the matters involving fundamental changes in the corporation and requiring shareholder approval?

Accepted Answer

A) Amendments to articles of incorporation. 
B) Sale or lease of corporate assets in the regular course of business. 
C) Selection of a corporate president. 
D) Removal of the corporation's officers. 
E) All of the above. 
A) Amendments to articles of incorporation. 
B) Sale or lease of corporate assets in the regular course of business. 
C) Selection of a corporate president. 
D) Removal of the corporation's officers. 
E) All of the above.

Question 12

The percentage of shares required for a quorum may vary from state to state and from company to company.

Accepted Answer

A) True 
 B)False

Question 13

The right of a shareholder to examine the books and records of the corporation may be denied if the shareholder:

Accepted Answer

A) seeks information to determine the financial condition of the corporation. 
B) desires to know the value of shares. 
C) seeks information to embarrass or cause loss to the corporation. 
D) desires the names and addresses of other shareholders. 
A) seeks information to determine the financial condition of the corporation. 
B) desires to know the value of shares. 
C) seeks information to embarrass or cause loss to the corporation. 
D) desires the names and addresses of other shareholders.

Question 14

If the board delegates to a committee its duty to select a new company president:

Accepted Answer

A) the members of that committee may be responsible individuals other than board members. 
B) the committee must be approved by the shareholders. 
C) the non-committee directors are relieved of liability for acts of the committee. 
D) the committee may exercise all the authority of the board. 
E) the committee must consist of board members and may be authorized unless otherwise provided by the articles of incorporation or bylaws. 
A) the members of that committee may be responsible individuals other than board members. 
B) the committee must be approved by the shareholders. 
C) the non-committee directors are relieved of liability for acts of the committee. 
D) the committee may exercise all the authority of the board. 
E) the committee must consist of board members and may be authorized unless otherwise provided by the articles of incorporation or bylaws.

Question 15

Special shareholder meetings may be called by:

Accepted Answer

A) the board of directors. 
B) holders of at least 10% of shares. 
C) Both (a) and (b). 
D) Neither (a) nor (b). 
A) the board of directors. 
B) holders of at least 10% of shares. 
C) Both (a) and (b). 
D) Neither (a) nor (b).

Question 16

A proxy is revocable to the same extent as an agency.

Accepted Answer

A) True 
 B)False

Question 17

A voting trust permits a concentration of corporate control in one or more persons.

Accepted Answer

A) True 
 B)False

Question 18

Tunso Corp.has 1,000 shares of stock outstanding that are permitted to vote for directors.If Tunso Corp.permits cumulative voting,a minority shareholder would need to vote how many shares to elect one of three directors?

Accepted Answer

A) 251 
B) 501 
C) 201 
D) 334 
A) 251 
B) 501 
C) 201 
D) 334

Question 19

As the shareholders' elected representatives,the board of directors are delegated the power to direct the business of the corporation.

Accepted Answer

A) True 
 B)False

Question 20

How does the management structure of a closely held corporation differ from that of a publicly traded corporation?

Accepted Answer

a.Yes.The officers and directors have a

Exam 35: Management Structure of Corporations

An officer or director's responsibility to exercise ordinary care and prudence in discharging duties is the:

While officers,as agents of a corporation,owe an agent's duty of obedience,diligence,and loyalty to the corporation,this is not true of directors.

One of the fiduciary duties of directors is the duty not to compete with the corporation.They may pursue their own business interest,but they may not:

If Marge,a vice president,made a contract on behalf of Barker Corporation when it was not within her authority,she is liable if she negligently exceeded her authority.

The directors of a corporation are expected to devote their full time to the corporation's affairs.

Explain the reasons why the accountability of the management of a corporation is a cultural issue.

Regarding the election of directors:

A quorum of shares must be present at the shareholders' meeting,either in person or by proxy,to make effective decisions.

If Marilyn and George form a corporation under the Revised Act with Marilyn as president and George as treasurer,Marilyn cannot also be corporate secretary.

The Revised Act requires that demand be made upon the board of directors to enforce the corporate right at issue as a prerequisite to bringing a derivative suit.

What are some of the matters involving fundamental changes in the corporation and requiring shareholder approval?

The percentage of shares required for a quorum may vary from state to state and from company to company.

The right of a shareholder to examine the books and records of the corporation may be denied if the shareholder:

If the board delegates to a committee its duty to select a new company president:

Special shareholder meetings may be called by:

A proxy is revocable to the same extent as an agency.

A voting trust permits a concentration of corporate control in one or more persons.

Tunso Corp.has 1,000 shares of stock outstanding that are permitted to vote for directors.If Tunso Corp.permits cumulative voting,a minority shareholder would need to vote how many shares to elect one of three directors?

As the shareholders' elected representatives,the board of directors are delegated the power to direct the business of the corporation.

How does the management structure of a closely held corporation differ from that of a publicly traded corporation?

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property, property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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