Exam 37: Corporate Governance and the Sarbanes-Oxley Act

Which of the following is true of shareholders?

Marshall is the purchasing agent for DigitoolArt Corporation. His job requires him to negotiate and execute contracts for purchasing office supplies and equipment for the corporation. Assume that Bronson, a computer salesperson, pays Marshall a $20,000 kickback to purchase from him computers needed by DigitoolArt Corporation. Which of the following duties of loyalty has Marshall breached in this scenario?

________ are rights that give existing shareholders the option of subscribing to new shares being issued in proportion to their current ownership interests.

________ is a doctrine that says if a shareholder dominates a corporation and uses it for improper purposes, a court can disregard the corporate entity and hold the shareholder personally liable for the corporation's debts and obligations.

Samson owns 1,500 shares out of the 10,000 outstanding shares of Comakote Corporation. If Comakote declares a stock dividend of 30 percent, what will be the total stock Samson has upon receiving his stock dividend?

Dividends are a distribution of corporate profits to shareholders.

Courts will pierce the corporate veil if the corporation has been formed with sufficient capital.

When is the annual shareholder's meeting held?

A system in which a shareholder can accumulate all of his or her votes and vote them all for one candidate or split them among several candidates is known as ________.

Shareholders elect a panel of decision makers known as the ________.

To prove usurping by a director or an officer, a corporation must have the financial ability to take advantage of the usurped opportunity.

A(n) ________ is a member of a board of directors who is not an officer of the corporation.

Which of the following is true of a shareholder voting agreement?

A director or corporate officer who usurps a corporate opportunity would be in violation of the director's fiduciary duty called ________.

In which of the following cases can the alter ego doctrine be invoked?

The record date for the declaration of dividends is set forth in the articles of incorporation.

Shareholder voting agreements have to be filed with the corporation.

Inkilwas Corporation has 30,000 outstanding shares. A shareholders' meeting is duly called to amend the articles of incorporation, and 17,501 shares are represented at the meeting. According to the Revised Model Business Corporations Act (RMBCA), what is the minimum number of outstanding shares that must be represented in this case to have a quorum?

One of the powers of a shareholder is his or her right to elect the board of directors.

If a fraud is committed by a member of the board of directors of a corporation, a written notice to the corporation from individual shareholders is not required to bring a derivative lawsuit.