Question 1

To escape personal liability,when a party enters into a pre-incorporation contract,it is enough for that party to simply state on the written contract that he or she is entering into the contract on behalf of a company to be incorporated.

Accepted Answer

A) True 
 B)False

Question 2

What condition(s)must be met before a corporation may purchase its own shares?

Accepted Answer

The answer of What condition(s)must be met before a corporation...

Question 3

Provincial securities legislation delegates control over the public offering of shares to provincial securities commissions.The goals of the legislation include all of the following EXCEPT

Accepted Answer

A) to ensure integrity of the market. 
B) to ensure fairness of the market. 
C) to ensure efficiency of the market. 
D) to fairly allocate investor losses. 
E) to promote investor confidence.

Question 4

Explain why legislation is necessary in areas of law other than contracts or torts to regulate the conduct of corporations and those who run them.

Accepted Answer

The answer of Explain why legislation is necessary in areas...

Question 5

The characteristics of corporations presents special problems for criminal liability in part because

Accepted Answer

A) it is often impossible to determine which individual is exercising control. 
B) a corporation cannot be imprisoned. 
C) the corporate veil cannot be pierced. 
D) a corporation is not subject to fines. 
E) a corporation cannot be dissolved.

Question 6

At present,and largely due to the Enron debacle and the events of the world-wide recession of 2008,there is a trend toward a greater consideration of ethics in corporate business.Will this continue?

Accepted Answer

The answer of At present,and largely due to the Enron...

Question 7

There are a number of statutes that contain protections for the benefit of employees.Which of the following pieces of legislation does NOT contain any provisions with respect to protection of employees?

Accepted Answer

A) occupational health and safety legislation 
B) human rights legislation 
C) employment standards legislation 
D) sale of goods legislation 
E) workplace safety legislation

Question 8

Secondary market liability occurs when someone who owns shares in a company sells them in circumstances where information released about the state of the company is false and not yet corrected.

Accepted Answer

A) True 
 B)False

Question 9

Briefly describe the circumstances whereby a corporation can be held liable in tort.

Accepted Answer

The answer of Briefly describe the circumstances whereby a corporation...

Question 10

Under criminal law,corporations are subject to be punished.Punishment can take place by

Accepted Answer

A) heavy fines on the corporation itself. 
B) imprisonment of the directors. 
C) finding the "directing mind" behind the offence and fining and/or imprisoning this person. 
D) dissolving the corporation. 
E) all of the above

Question 11

Mandy had her securities licence suspended by the securities commission,yet she continues to buy and sell stock as an investment dealer.Mandy certainly

Accepted Answer

A) has committed a criminal offence. 
B) will have all her stock trades cancelled and/or reversed. 
C) will be barred for life from working in the securities industry in Canada. 
D) must go up before the discipline committee of the securities commission. 
E) will face private discipline by the investment house where she is an agent.

Exam 27: Corporate Governance: External Responsibilities