Question 1

The right of dissent would exist in all of the following cases EXCEPT where the corporation:

Accepted Answer

A) is party to a consolidation. 
B) is party to a merger. 
C) will be the one acquired in a compulsory share exchange. 
D) declines to declare dividends for the third year in a row. 
A) is party to a consolidation. 
B) is party to a merger. 
C) will be the one acquired in a compulsory share exchange. 
D) declines to declare dividends for the third year in a row.

Question 2

The consolidation of AB Corporation and ZX Corporation requires the affirmative majority vote of:

Accepted Answer

A) the boards of directors and shareholders of both corporations. 
B) the boards of directors of both corporations, but not the shareholders. 
C) the shareholders of both corporations, but not the boards of directors. 
D) the directors and shareholders of one of the corporations, but not both corporations. 
A) the boards of directors and shareholders of both corporations. 
B) the boards of directors of both corporations, but not the shareholders. 
C) the shareholders of both corporations, but not the boards of directors. 
D) the directors and shareholders of one of the corporations, but not both corporations.

Question 3

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.

Accepted Answer

A) True 
 B)False

Question 4

Match each statement with the correct term below.
-corporation de facto

Accepted Answer

A) Debt agreement specifying loan terms. 
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 signs the articles of incorporation.
F)Rules governing a corporation's internal management.
G)One formed in substantial compliance with the incorporation statute and having all corporate attributes.
H)One not formed in compliance with the statute but recognized for most purposes as a corporation.
I)One whose shares are owned by a large number of people and are widely traded.
J)One created to administer a unit of local civil government.
K)Any action taken or contract made by a corporation that goes beyond its express and implied powers.
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)Person who agrees to purchase stock in a corporation.
O)Condition the payment of interest to some extent on corporate earnings.
P)Bonds subject to redemption.
Q)Eligible corporation electing to be taxed as a partnership.
R)Corporate ownership interest having superior contractual rights with regard to dividends, liquidation rights, or both.
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. 
A) Debt agreement specifying loan terms. 
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 signs the articles of incorporation.
F)Rules governing a corporation's internal management.
G)One formed in substantial compliance with the incorporation statute and having all corporate attributes.
H)One not formed in compliance with the statute but recognized for most purposes as a corporation.
I)One whose shares are owned by a large number of people and are widely traded.
J)One created to administer a unit of local civil government.
K)Any action taken or contract made by a corporation that goes beyond its express and implied powers.
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)Person who agrees to purchase stock in a corporation.
O)Condition the payment of interest to some extent on corporate earnings.
P)Bonds subject to redemption.
Q)Eligible corporation electing to be taxed as a partnership.
R)Corporate ownership interest having superior contractual rights with regard to dividends, liquidation rights, or both.
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.

Question 5

Incorporation statutes usually provide only for involuntary dissolution of a corporation.

Accepted Answer

A) True 
 B)False

Question 6

A creditor may petition the court to judicially dissolve a corporation if he has an unsatisfied judgment against the corporation and:
a.the corporation is insolvent.
b.the creditor will become insolvent if not paid.
c.the debt is over $5,000.
d.All of the above.

Accepted Answer

a.A fundamental change alters the basic

Question 7

Dissolution that is judicial may be brought about when:

Accepted Answer

A) a shareholder brings a proceeding because the directors are deadlocked in management of the corporate affairs and the corporation is suffering irreparable injury. 
B) the board of directors creates a resolution approved by shareholders to dissolve. 
C) the shareholders of a closely held corporation adopt a unanimous agreement to dissolve. 
D) the corporation is without a registered agent for over 60 days. 
A) a shareholder brings a proceeding because the directors are deadlocked in management of the corporate affairs and the corporation is suffering irreparable injury. 
B) the board of directors creates a resolution approved by shareholders to dissolve. 
C) the shareholders of a closely held corporation adopt a unanimous agreement to dissolve. 
D) the corporation is without a registered agent for over 60 days.

Question 8

Match each statement with the correct term below.
-promoter

Accepted Answer

A) Debt agreement specifying loan terms. 
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 signs the articles of incorporation.
F)Rules governing a corporation's internal management.
G)One formed in substantial compliance with the incorporation statute and having all corporate attributes.
H)One not formed in compliance with the statute but recognized for most purposes as a corporation.
I)One whose shares are owned by a large number of people and are widely traded.
J)One created to administer a unit of local civil government.
K)Any action taken or contract made by a corporation that goes beyond its express and implied powers.
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)Person who agrees to purchase stock in a corporation.
O)Condition the payment of interest to some extent on corporate earnings.
P)Bonds subject to redemption.
Q)Eligible corporation electing to be taxed as a partnership.
R)Corporate ownership interest having superior contractual rights with regard to dividends, liquidation rights, or both.
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. 
A) Debt agreement specifying loan terms. 
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 signs the articles of incorporation.
F)Rules governing a corporation's internal management.
G)One formed in substantial compliance with the incorporation statute and having all corporate attributes.
H)One not formed in compliance with the statute but recognized for most purposes as a corporation.
I)One whose shares are owned by a large number of people and are widely traded.
J)One created to administer a unit of local civil government.
K)Any action taken or contract made by a corporation that goes beyond its express and implied powers.
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)Person who agrees to purchase stock in a corporation.
O)Condition the payment of interest to some extent on corporate earnings.
P)Bonds subject to redemption.
Q)Eligible corporation electing to be taxed as a partnership.
R)Corporate ownership interest having superior contractual rights with regard to dividends, liquidation rights, or both.
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.

Question 9

Match each statement with the correct term below.
-callable bonds

Accepted Answer

A) Debt agreement specifying loan terms. 
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 signs the articles of incorporation.
F)Rules governing a corporation's internal management.
G)One formed in substantial compliance with the incorporation statute and having all corporate attributes.
H)One not formed in compliance with the statute but recognized for most purposes as a corporation.
I)One whose shares are owned by a large number of people and are widely traded.
J)One created to administer a unit of local civil government.
K)Any action taken or contract made by a corporation that goes beyond its express and implied powers.
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)Person who agrees to purchase stock in a corporation.
O)Condition the payment of interest to some extent on corporate earnings.
P)Bonds subject to redemption.
Q)Eligible corporation electing to be taxed as a partnership.
R)Corporate ownership interest having superior contractual rights with regard to dividends, liquidation rights, or both.
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. 
A) Debt agreement specifying loan terms. 
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 signs the articles of incorporation.
F)Rules governing a corporation's internal management.
G)One formed in substantial compliance with the incorporation statute and having all corporate attributes.
H)One not formed in compliance with the statute but recognized for most purposes as a corporation.
I)One whose shares are owned by a large number of people and are widely traded.
J)One created to administer a unit of local civil government.
K)Any action taken or contract made by a corporation that goes beyond its express and implied powers.
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)Person who agrees to purchase stock in a corporation.
O)Condition the payment of interest to some extent on corporate earnings.
P)Bonds subject to redemption.
Q)Eligible corporation electing to be taxed as a partnership.
R)Corporate ownership interest having superior contractual rights with regard to dividends, liquidation rights, or both.
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.

Question 10

Discuss the similarity between a management buyout and a cash-out combination.

Accepted Answer

Cash-out combinations are used to elimin

Question 11

A dissolution may be judicially decreed if a proceeding is brought by the state,a shareholder,or a creditor.

Accepted Answer

A) True 
 B)False

Question 12

The secretary of state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax.

Accepted Answer

A) True 
 B)False

Question 13

A(n)__________ is a general invitation to all of the shareholders of a target company to tender their shares for sale at a specified price.

Accepted Answer

A) compulsory share exchange. 
B) tender offer. 
C) buyout. 
D) None of the above. 
A) compulsory share exchange. 
B) tender offer. 
C) buyout. 
D) None of the above.

Question 14

Under the Dodd-Frank Act signed into law in 2010,proxy solicitations asking shareholders to approve an acquisition,merger,or consolidation in publicly held companies must provide shareholders with a binding vote to approve any compensation relating to these combinations.

Accepted Answer

A) True 
 B)False

Question 15

The 1999 amendments to the Revised MBCA did not change the voting rule; fundamental changes still need be approved by a majority of the votes entitled to be cast.

Accepted Answer

A) True 
 B)False

Question 16

Dissolution of a corporation does not terminate its existence,and does not require that it liquidate its assets.

Accepted Answer

A) True 
 B)False

Question 17

If a company owns 90 percent or more of a subsidiary's stock,a merger may be effected with approval of the parent's board of directors alone,without resort to shareholders.This is called a:

Accepted Answer

A) parent-sub merger. 
B) board merger. 
C) short-cut merger. 
D) short-form merger. 
A) parent-sub merger. 
B) board merger. 
C) short-cut merger. 
D) short-form merger.

Question 18

Match each statement with the correct term below.
-conversion

Accepted Answer

A) Directors are elected by a plurality of votes. 
B) Authorization to vote another's shares at a shareholder meeting. 
C) Permits a domestic business corporation to become a domestic or foreign partnership, LLC, or other entity; permits a domestic of foreign partnership, LLC, or other entity to become a domestic business corporation. 
D) Change of a corporation's state of incorporation. 
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 to enforce a claim against the corporation based upon his ownership of shares.
I)Must exercise ordinary care and prudence.
J)Fiduciary obligation of faithfulness; subordination of self-interest.
K)Must act within their respective authority.
L)The combination of assets of two or more corporations into one of the corporations.
M)The combination of two or more corporations into a new corporation.
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. 
A) Directors are elected by a plurality of votes. 
B) Authorization to vote another's shares at a shareholder meeting. 
C) Permits a domestic business corporation to become a domestic or foreign partnership, LLC, or other entity; permits a domestic of foreign partnership, LLC, or other entity to become a domestic business corporation. 
D) Change of a corporation's state of incorporation. 
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 to enforce a claim against the corporation based upon his ownership of shares.
I)Must exercise ordinary care and prudence.
J)Fiduciary obligation of faithfulness; subordination of self-interest.
K)Must act within their respective authority.
L)The combination of assets of two or more corporations into one of the corporations.
M)The combination of two or more corporations into a new corporation.
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.

Question 19

Liquidation of a corporation:

Accepted Answer

A) is carried out by a court-appointed receiver in any liquidation. 
B) is carried out by the board of directors, serving as trustees, in a voluntary liquidation. 
C) results in paying first stockholders with a liquidation preference, then outside creditors, then expenses of liquidation. 
D) is set up to protect stockholders and the board of directors, but not creditors. 
A) is carried out by a court-appointed receiver in any liquidation. 
B) is carried out by the board of directors, serving as trustees, in a voluntary liquidation. 
C) results in paying first stockholders with a liquidation preference, then outside creditors, then expenses of liquidation. 
D) is set up to protect stockholders and the board of directors, but not creditors.

Question 20

A shareholder who dissents to a merger and is entitled to the appraisal remedy generally does not have the right to attack the validity of the corporate action.

Accepted Answer

A) True 
 B)False

Exam 36: Fundamental Changes of Corporations

The right of dissent would exist in all of the following cases EXCEPT where the corporation:

The consolidation of AB Corporation and ZX Corporation requires the affirmative majority vote of:

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.

Match each statement with the correct term below. -corporation de facto

Incorporation statutes usually provide only for involuntary dissolution of a corporation.

A creditor may petition the court to judicially dissolve a corporation if he has an unsatisfied judgment against the corporation and: a.the corporation is insolvent. b.the creditor will become insolvent if not paid. c.the debt is over $5,000. d.All of the above.

Dissolution that is judicial may be brought about when:

Match each statement with the correct term below. -promoter

Match each statement with the correct term below. -callable bonds

Discuss the similarity between a management buyout and a cash-out combination.

A dissolution may be judicially decreed if a proceeding is brought by the state,a shareholder,or a creditor.

The secretary of state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax.

A(n)__________ is a general invitation to all of the shareholders of a target company to tender their shares for sale at a specified price.

Under the Dodd-Frank Act signed into law in 2010,proxy solicitations asking shareholders to approve an acquisition,merger,or consolidation in publicly held companies must provide shareholders with a binding vote to approve any compensation relating to these combinations.

The 1999 amendments to the Revised MBCA did not change the voting rule; fundamental changes still need be approved by a majority of the votes entitled to be cast.

Dissolution of a corporation does not terminate its existence,and does not require that it liquidate its assets.

If a company owns 90 percent or more of a subsidiary's stock,a merger may be effected with approval of the parent's board of directors alone,without resort to shareholders.This is called a:

Match each statement with the correct term below. -conversion

Liquidation of a corporation:

A shareholder who dissents to a merger and is entitled to the appraisal remedy generally does not have the right to attack the validity of the corporate action.

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

Management Structure 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

Filters