Question 1

Contrast the obligations and duties of directors and shareholders of a corporation.

Accepted Answer

Basically, the shareholders of a corpora

Question 2

Indicate two examples where a director can be personally liable for the debts of the corporation.

Accepted Answer

When the director allows dividends to be

Question 3

In jurisdictions in which the registration system of incorporation is used, what are the rules governing the internal regulations of a company called?

Accepted Answer

The articl

Question 4

Explain the significance of the determination that a corporation is a broadly held corporation as opposed to a closely held corporation.

Accepted Answer

There are more significant reporting and

Question 5

What happens if annual returns are not filed for a corporation?

Accepted Answer

A certificate of dis

Question 6

Explain the significance of a personal guarantee.

Accepted Answer

It is a guarantee of payment f

Question 7

Distinguish between selling the assets of a corporation and selling its shares.

Accepted Answer

If its shares are sold, the corporation

Question 8

Which of the following situations would allow a shareholder of a closely-held corporation, with permission of the court, 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 director, voted to end the employment contract of the fifth director, and voted not to buy his shares. 
B)  If the directors refused to declare a dividend. 
C)  If the corporation had been wronged by the negligent and fraudulent acts of one of its directors, but the corporation refused to take any action against the wrongdoer. 
D)  If the directors solicited proxies from all of the shareholders. 
E)  If the shareholders refused to enter into a shareholder's agreement. 
A)  If four of the five directors, in the best interests of the corporation, voted against the fifth director, voted to end the employment contract of the fifth director, and voted not to buy his shares. 
B)  If the directors refused to declare a dividend. 
C)  If the corporation had been wronged by the negligent and fraudulent acts of one of its directors, but the corporation refused to take any action against the wrongdoer. 
D)  If the directors solicited proxies from all of the shareholders. 
E)  If the shareholders refused to enter into a shareholder's agreement.

Question 9

If a director fails in his duty to the corporation, what rights does a minority shareholder have to hold him accountable?

Accepted Answer

The minority shareholder can b

Question 10

How can a corporation be brought to an end?

Accepted Answer

In most jurisdictions, if you simply fai

Question 11

Smith, Jones, and Brown incorporated XYZ Ltd. The three were sole shareholders, directors, officers, and employees. Jones and Brown disliked working with Smith. They knew he was good for the business, but they disliked his personality and politics. After a year, Jones and Brown, as directors, removed Smith as an officer and employee and raised their own salaries as employees. They then voted Smith out as a director at the next shareholders' meeting. Which one of the following provisions would aid Smith?

Accepted Answer

A)  Indoor-management rule 
B)  Relief-from-oppression provisions 
C)  Dissent procedures 
D)  Preemptive right provisions 
E)  Derivative-action provisions 
A)  Indoor-management rule 
B)  Relief-from-oppression provisions 
C)  Dissent procedures 
D)  Preemptive right provisions 
E)  Derivative-action provisions

Question 12

Which one of the following is an example of breach of fiduciary duty?

Accepted Answer

A)  The directors refused to declare a dividend, contrary to the request by its preferred shareholders. 
B)  A shareholder owning 2% of the outstanding shares started a business in direct competition with the corporation in which he held shares. 
C)  An officer of the corporation learned of a business opportunity intended for the corporation and intercepted it for his own benefit. 
D)  The directors of the corporation refuse to give a pay raise to the employees although they had not received a pay raise for five years. 
E)  A director profited $120,000 from a contract between the corporation and a firm in which he had an interest after he made full disclosure of his interest to the board of directors and abstained from the vote on the contract. 
A)  The directors refused to declare a dividend, contrary to the request by its preferred shareholders. 
B)  A shareholder owning 2% of the outstanding shares started a business in direct competition with the corporation in which he held shares. 
C)  An officer of the corporation learned of a business opportunity intended for the corporation and intercepted it for his own benefit. 
D)  The directors of the corporation refuse to give a pay raise to the employees although they had not received a pay raise for five years. 
E)  A director profited $120,000 from a contract between the corporation and a firm in which he had an interest after he made full disclosure of his interest to the board of directors and abstained from the vote on the contract.

Question 13

Where a corporation is not able to pay the debts it owes, the creditors can turn to the shareholders for payment.

Accepted Answer

A) True 
 B)False

Question 14

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)  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. 
B)  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. 
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)  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. 
E)  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. 
A)  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. 
B)  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. 
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)  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. 
E)  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.

Question 15

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 sh

Question 16

Which of the following is a fiduciary relationship?

Accepted Answer

A)  Agent and the third party 
B)  Shareholders and the corporation 
C)  Officer of the corporation and the shareholders 
D)  Directors of the corporation and the corporation 
E)  Director of the corporation and the shareholders of the corporation 
A)  Agent and the third party 
B)  Shareholders and the corporation 
C)  Officer of the corporation and the shareholders 
D)  Directors of the corporation and the corporation 
E)  Director of the corporation and the shareholders of the corporation

Question 17

A corporation is a fiction that does not exist in reality.

Accepted Answer

A) True 
 B)False

Question 18

What does it mean to be a closely held corporation?

Accepted Answer

In general, it is a corporatio

Question 19

Discuss the advantages and disadvantages of incorporation as a method of carrying on business as compared to sole proprietorship and partnership.

Accepted Answer

The main problem with partnership and so

Question 20

A securities commission is

Accepted Answer

A)  an authorization to exchange confidential information. 
B)  a permission to transfer shares in a closely held company. 
C)  a provincial agency that serves as watchdog on the stock market. 
D)  a collateral right to debt. 
E)  a fee or percentage allowed to a shareholder in a share transaction.
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 
A)  an authorization to exchange confidential information. 
B)  a permission to transfer shares in a closely held company. 
C)  a provincial agency that serves as watchdog on the stock market. 
D)  a collateral right to debt. 
E)  a fee or percentage allowed to a shareholder in a share transaction.
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.

Contrast the obligations and duties of directors and shareholders of a corporation.

Indicate two examples where a director can be personally liable for the debts of the corporation.

In jurisdictions in which the registration system of incorporation is used, what are the rules governing the internal regulations of a company called?

Explain the significance of the determination that a corporation is a broadly held corporation as opposed to a closely held corporation.

What happens if annual returns are not filed for a corporation?

Explain the significance of a personal guarantee.

Distinguish between selling the assets of a corporation and selling its shares.

Which of the following situations would allow a shareholder of a closely-held corporation, with permission of the court, to sue on behalf of the corporation?

If a director fails in his duty to the corporation, what rights does a minority shareholder have to hold him accountable?

How can a corporation be brought to an end?

Which one of the following is an example of breach of fiduciary duty?

Where a corporation is not able to pay the debts it owes, the creditors can turn to the shareholders for payment.

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

Which of the following is a fiduciary relationship?

A corporation is a fiction that does not exist in reality.

What does it mean to be a closely held corporation?

Discuss the advantages and disadvantages of incorporation as a method of carrying on business as compared to sole proprietorship and partnership.

A securities commission is

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Introduction to the Legal System

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Formation of Contracts Continued

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Exam 12: Corporations

Contrast the obligations and duties of directors and shareholders of a corporation.

Indicate two examples where a director can be personally liable for the debts of the corporation.

In jurisdictions in which the registration system of incorporation is used, what are the rules governing the internal regulations of a company called?

Explain the significance of the determination that a corporation is a broadly held corporation as opposed to a closely held corporation.

What happens if annual returns are not filed for a corporation?

Explain the significance of a personal guarantee.

Distinguish between selling the assets of a corporation and selling its shares.

Which of the following situations would allow a shareholder of a closely-held corporation, with permission of the court, to sue on behalf of the corporation?

If a director fails in his duty to the corporation, what rights does a minority shareholder have to hold him accountable?

How can a corporation be brought to an end?

Which one of the following is an example of breach of fiduciary duty?

Where a corporation is not able to pay the debts it owes, the creditors can turn to the shareholders for payment.

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

Which of the following is a fiduciary relationship?

A corporation is a fiction that does not exist in reality.

What does it mean to be a closely held corporation?

Discuss the advantages and disadvantages of incorporation as a method of carrying on business as compared to sole proprietorship and partnership.

A securities commission is

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes the Courts and Alternatives to Litigation

Intentional Torts

Negligence, Professional Liability, and Insurance Law

Formation of Contracts

Formation of Contracts Continued

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