Question 1

Which of the following is true regarding state approval of consolidations?

Accepted Answer

A)   There is no requirement that the state approve consolidations.
B)   After reviewing the plan to see that legal requirements are met, the secretary of state issues a certificate to grant approval.
C)   The secretary of state must approve consolidations so long as the corporate entity at issue has sufficient assets.
D)   The secretary of state must approve consolidations so long as creditors of the corporate entity at issue do not remain unpaid.
E)   The secretary of state must approve consolidations so long as no more than 10% of either company's shareholders object.F) B) and D)
G) B) and C)

Question 2

[Battle for the Board] The Board of Directors of InfoHub, an internet service provider, contains 9 directors. Two of the directors, Jude and Rostan, decide they want to replace several of the directors with individuals who support their position and then take over the Board and control the company. Jude thinks it's a long shot, but Rostan tells him they could do it because Rostan has gradually been accumulating shares and they can get a majority of proxies on their side. Jude says the proxies are not important, because it's the shareholders that vote for the members of the board but it is difficult for them to find the names of shareholders. Rostan tells him not to worry, because he will get the shareholder list and focus only a few key shareholders, then get their proxies on his side before the next shareholder meeting.
-Is Jude correct that the proxies do not really matter?

Accepted Answer

A)   Yes, the proxies do not have a right to vote at shareholder meetings.
B)   Yes, only shareholders have a right to vote at shareholder meetings.
C)   No, the holder of a proxy has the right to vote at shareholder meetings.
D)   No, although only shareholders have a right to vote at shareholder meetings, the proxies can influence the shareholders.
E)   Yes, proxies have no rights under the law.F) A) and B)
G) A) and C)

Question 3

What steps must a target corporation take once an aggressor has presented its offer to the target corporation's shareholders?

Accepted Answer

Once an aggressor has presented its offe...

Question 4

[Cheeseland Purchase] Cheeseland, Inc., manufactures processed cheese products. BigCheese, Inc., seeks to purchase Cheeseland's well-known trademarks and logos, and its factory and equipment. The Board of Directors of both companies vote in favor of the deal. Alba is a 15% shareholder of Cheeseland. Her grandfather started the business many years ago and she does not want the company to sell off its endearing trademark and the factory her grandfather built. She visits Myron, an attorney, and Myron tells her that the Board's vote is legitimate to finalize the deal with BigCheese and the best she can do is take the money. Cyril is a shareholder in BigCheese, and his grandfather was cheated fifty years ago by Alba's grandfather and he doesn't want BigCheese to be responsible for Cheeseland's enormous liabilities. Cyril threatens to take BigCheese to court because he claims shareholder approval is required to purchase Cheeseland.
-Is Myron correct that the vote by Cheeseland's Board of Directors is legitimate to finalize the deal between the two companies?

Accepted Answer

A)   Yes, Cheeseland only needs the approval of its board of directors before it can sell its assets.
B)   Yes, Cheeseland only needs the approval of its board of directors for a merger.
C)   No, Cheeseland needs the approval of its shareholders for a merger
D)   No, Cheeseland needs the approval of both its board of directors and its shareholders before it can sell its assets.
E)   No, Cheeseland only needs the approval of its shareholders before it can sell its assets.F) A) and B)
G) A) and C)

Question 5

________ are a type of merger that does not require shareholder approval.

Accepted Answer

A)   Short-form mergers
B)   Short-term mergers
C)   Minimalist mergers
D)   Live-action mergers
E)   State controlled mergersF) A) and B)
G) None of the above

Question 6

Momentum Inc. and Fellows Inc. execute a legal contract that combines Fellows Inc. into Momentum Inc. What is this called?

Accepted Answer

A)   A merger
B)   A consolidation
C)   An executed company
D)   A contractual company
E)   A reorganizationF) A) and B)
G) A) and C)

Question 7

GC Corporation received a notice from the secretary of state that it was being involuntarily dissolved. Which of the following could be a reason for the involuntary dissolution?

Accepted Answer

A)   GS submitted its annual report forty-five days after its due date.
B)   GS fired its registered agent and did not have a registered agent for over thirty days.
C)   GS submitted its annual report thirty days after its due date.
D)   GS paid its taxes more than sixty days after the due date.
E)   GS failed to pay taxes within forty-five days after its due date.F) A) and B)
G) None of the above

Question 8

When two or more corporations merge into one, the ________ is the term for the remaining corporation.

Accepted Answer

A)   resulting corporation
B)   standing corporation
C)   approved corporation
D)   surviving corporation
E)   persisting corporationF) B) and D)
G) C) and E)

Question 9

Target corporations are not required by federal securities law to assist aggressors in any way.

Accepted Answer

A) True 
 B)False

Question 10

When dissenting shareholders do not properly invoke their appraisal rights, will they be forced to comply with the majority of the corporations' shareholders?

Accepted Answer

A)   No, dissenting shareholders are never forced to comply with the decision of the majority of the corporations' shareholders.
B)   Yes, in such a situation, dissenting shareholders must comply with the decision of the majority of the corporations' shareholders.
C)   Yes, although the dissenting shareholders cannot exercise their appraisal rights if not properly invoked, a court will not force them to comply with the decision of the majority of the corporations' shareholders
D)   No, dissenting shareholders need not comply as long as they adequately communicate their appraisal rights.
E)   No, dissenting shareholders need not comply because the procedures governing appraisal rights need not be strictly followed.F) B) and E)
G) A) and B)

Exam 40: Corporations: Mergers, Consolidations, Terminations

Target corporations are not required by federal securities law to assist aggressors in any way.

Correct Answer
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Correct Answer
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What steps must a target corporation take once an aggressor has presented its offer to the target corporation's shareholders?

Correct Answer
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Once an aggressor has presented its offe...
View Answer

Correct Answer
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________ are a type of merger that does not require shareholder approval.

Correct Answer
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GC Corporation received a notice from the secretary of state that it was being involuntarily dissolved. Which of the following could be a reason for the involuntary dissolution?

Correct Answer
verified

Which of the following is true regarding state approval of consolidations?

Correct Answer
verified

Momentum Inc. and Fellows Inc. execute a legal contract that combines Fellows Inc. into Momentum Inc. What is this called?

Correct Answer
verified

When dissenting shareholders do not properly invoke their appraisal rights, will they be forced to comply with the majority of the corporations' shareholders?

Correct Answer
verified

When two or more corporations merge into one, the ________ is the term for the remaining corporation.

Correct Answer
verified

Exam 40: Corporations: Mergers, Consolidations, Terminations

Target corporations are not required by federal securities law to assist aggressors in any way.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What steps must a target corporation take once an aggressor has presented its offer to the target corporation's shareholders?

Correct AnswerverifiedOnce an aggressor has presented its offe...View AnswerShow Answer

Correct AnswerverifiedShow Answer

________ are a type of merger that does not require shareholder approval.

Correct AnswerverifiedShow Answer

GC Corporation received a notice from the secretary of state that it was being involuntarily dissolved. Which of the following could be a reason for the involuntary dissolution?

Correct AnswerverifiedShow Answer

Which of the following is true regarding state approval of consolidations?

Correct AnswerverifiedShow Answer

Momentum Inc. and Fellows Inc. execute a legal contract that combines Fellows Inc. into Momentum Inc. What is this called?

Correct AnswerverifiedShow Answer

When dissenting shareholders do not properly invoke their appraisal rights, will they be forced to comply with the majority of the corporations' shareholders?

Correct AnswerverifiedShow Answer

When two or more corporations merge into one, the ________ is the term for the remaining corporation.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Once an aggressor has presented its offe...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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