Question 1

Under the 1999 amendments to the Revised Act, charter amendments need be approved by only a plurality of the shares cast at a meeting at which exists a quorum consisting of at least a majority of the votes entitled to be cast on the amendment.

Accepted Answer

A) True 
 B)False  True

Question 2

The statutory provisions governing dissolution and liquidation usually prescribe procedures to safeguard the interests of the corporation's creditors.These procedures include:

Accepted Answer

A)   the preservation of claims against the corporation.
B)   a general publication of notice.
C)   the required mailing of notice to known creditors.
D)   All of these. D

Question 3

a.In general, what is considered a fundamental change in a corporation? Give three examples of what would be considered a fundamental change.
b.Who proposes such fundamental changes? Who must approve them? Explain.
c.Brian is a minority shareholder in Gryath, Inc.He opposes a fundamental change that is approved and implemented.What rights does he have?

Accepted Answer

a.A fundamental change alters the basic structure of a corporation.Fundamental changes include charter amendments, the sale or lease of all or substantially all of a corporation's assets, mergers, consolidations, compulsory share exchanges, and dissolution of the corporation. 
b.While board members or shareholders may propose the change, shareholders give approval for fundamental changes.
c.If Brian dissents and strictly complies with provisions in the corporate statute, he is entitled to receive the fair value of his shares, plus accrued interest.In order to perfect his right to payment for his shares, a dissenting shareholder must make a written demand within the prescribed time period.A dissenting shareholder that complies with all of the applicable requirements is entitled to an appraisal remedy.

Question 4

If Elliot, a shareholder who dissents to a corporate action, is entitled to appraisal remedies, they will be the:

Accepted Answer

A)   average purchase price for the shares during the preceding 30 days.
B)   fair value of the shares immediately before the action to which he objects is taken.
C)   par value of the shares as set forth in the articles of incorporation..
D)   fair value of his shares as of the day the corporation agrees to purchase the shares.

Question 5

If a purchaser of all a corporation's assets continues the seller's product line, some courts impose upon the purchaser strict tort liability for defects in products previously manufactured by the seller corporation.

Accepted Answer

A) True 
 B)False

Question 6

After dissolution, the corporation must cease carrying on its business except as is necessary to wind up.

Accepted Answer

A) True 
 B)False

Question 7

a.Action Corporation purchases all of the assets of the Bell Corporation.After the purchase, a creditor of the Bell Corporation asserts that, by buying the assets of the Bell Corporation, Action has automatically assumed all of Bell's obligations.Is he correct? Explain.
b.Dicton Corporation is merged into the Crag Corporation.One of Dicton's creditors was not paid before the merger occurred.The creditor demands payment from the board of directors of the Crag Corporation.The board says that because the Dicton Corporation no longer exists, Crag has no obligation to the creditor.Who is right? Explain your answer.

Accepted Answer

The answer of a.Action Corporation purchases all of the assets...

Question 8

A court may dissolve a corporation in a proceeding brought by a shareholder when:

Accepted Answer

A)   the directors are deadlocked and the shareholders are unable to break the deadlock.
B)   the shareholders are deadlocked and have failed to elect directors for at least two consecutive annual meetings.
C)   the corporate assets are being misapplied.
D)   All of these .

Question 9

In which of the following situations may a nonjudicial dissolution of a corporation occur?

Accepted Answer

A)   By voluntary action on the part of all of the holders of outstanding stock.
B)   By shareholders of a close corporation who elect in the articles of incorporation to have the power to dissolve the corporation.
C)   By expiration of the time period provided in the articles of incorporation.
D)   A nonjudicial dissolution may occur in all of the above ways.
E)   A corporation may only be dissolved by judicial action.

Question 10

The __________ gives shareholders who elect such a right in the articles of incorporation the power to dissolve the corporation.

Accepted Answer

A)   appraisal remedy
B)   Statutory Close Corporation Supplement
C)   U.C.C.
D)   None of these.

Question 11

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

Accepted Answer

The answer of Discuss what happens to a corporation after...

Question 12

The combination of two or more corporations into a new corporation is known as:

Accepted Answer

A)   short-form merger.
B)   consolidation.
C)   compulsory share exchange.
D)   merger.

Question 13

The courts may grant a petition of involuntary dissolution if shareholders:

Accepted Answer

A)   show that the corporation has not kept adequate records or filed annual reports.
B)   show that corporate assets are being squandered.
C)   did not receive their dividends.
D)   do not approve of fundamental changes of the board.

Question 14

A sale of substantially all of the assets of a corporation that is in the ordinary course of business of the corporation will not require shareholder approval.

Accepted Answer

A) True 
 B)False

Question 15

The board approves a proposed amendment to deny existing preemptive rights to Class A preferred, and to issue stock in a new Class D preferred that would be accorded liquidation preference after all other classes of preferred stock.Preferred Classes B and C would remain the same.Which of the following would be true?

Accepted Answer

A)   A majority of Class A, B, and C shareholders all together would be needed to pass the amendment.
B)   Only Class B and C shareholders vote.
C)   Class B and C shareholders would not be entitled to vote at all.
D)   Class A and C shareholders would vote together.

Question 16

Any method of combination of corporations that involves shares, proxy solicitations, or tender offers may be subject to federal securities regulation.

Accepted Answer

A) True 
 B)False

Question 17

A compulsory share exchange happens when two companies wish to merge into one.

Accepted Answer

A) True 
 B)False

Question 18

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)   tender offer.
B)   buyout.
C)   compulsory share exchange.
D)   None of these.

Question 19

A court may not dissolve a corporation in a proceeding brought by a shareholder if it is only established that the acts of the directors are merely oppressive and not destructive.

Accepted Answer

A) True 
 B)False

Question 20

The concept of a combination that makes a publicly held corporation a private one and includes cash-out contributions and management buyouts is a:

Accepted Answer

A)   procedure.
B)   merger.
C)   going private transaction.
D)   None of these.

Exam 36: Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Under the 1999 amendments to the Revised Act, charter amendments need be approved by only a plurality of the shares cast at a meeting at which exists a quorum consisting of at least a majority of the votes entitled to be cast on the amendment.

The statutory provisions governing dissolution and liquidation usually prescribe procedures to safeguard the interests of the corporation's creditors.These procedures include:

If Elliot, a shareholder who dissents to a corporate action, is entitled to appraisal remedies, they will be the:

If a purchaser of all a corporation's assets continues the seller's product line, some courts impose upon the purchaser strict tort liability for defects in products previously manufactured by the seller corporation.

After dissolution, the corporation must cease carrying on its business except as is necessary to wind up.

A court may dissolve a corporation in a proceeding brought by a shareholder when:

In which of the following situations may a nonjudicial dissolution of a corporation occur?

The __________ gives shareholders who elect such a right in the articles of incorporation the power to dissolve the corporation.

Discuss what happens to a corporation after dissolution and what protection is afforded creditors of the corporation.

The combination of two or more corporations into a new corporation is known as:

The courts may grant a petition of involuntary dissolution if shareholders:

A sale of substantially all of the assets of a corporation that is in the ordinary course of business of the corporation will not require shareholder approval.

Any method of combination of corporations that involves shares, proxy solicitations, or tender offers may be subject to federal securities regulation.

A compulsory share exchange happens when two companies wish to merge into one.

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.

A court may not dissolve a corporation in a proceeding brought by a shareholder if it is only established that the acts of the directors are merely oppressive and not destructive.

The concept of a combination that makes a publicly held corporation a private one and includes cash-out contributions and management buyouts is a: