Question 1

The French Penal Code adopts what is called the ________ which requires that corporate criminal liability be applied only in cases that pertain to an "express mention in the law or in a French regulation."

Accepted Answer

A)  Specialty principal
B)  Protectionist principal
C)  High priority rule
D)  Strict liability rule
E)  Res ipsa standardF) A) and E)
G) D) and E)

Question 2

Lydia is a director of a company that develops expensive residential subdivisions.The company is considering purchasing a large section of land on which to put a development.Lydia happens to own some of the land.What duty,if any,does she have regarding disclosure? Also discuss what steps,if any,should be taken by the board when considering the matter,and why,or why not they should take those steps.

Accepted Answer

Lydia has a duty to disclose her self-in...

Question 3

Which of the following is NOT within the primary role of directors?

Accepted Answer

A)  Authorizing corporate policy decisions
B)  Appointing,supervising and removing corporate officers
C)  Declaring pay and corporate dividends for shareholders
D)  Elect and remove other directors
E)  Making financial decisionsF) A) and C)
G) A) and E)

Question 4

If corporate directors fail to sue when the corporation has been harmed by an individual,another corporation,or a director,individual shareholders can file a[n] ________ on behalf of the corporation.

Accepted Answer

A)  Shareholder's direct suit
B)  Active allocation suit
C)  Investigative action
D)  Shareholder's derivative suit
E)  Shareholder action suitF) A) and E)
G) A) and D)

Question 5

A stock subscription agreement signed before incorporation may obligate a person to purchase shares in the corporation.

Accepted Answer

A) True 
 B)False

Question 6

Hans receives a dividend from his closely held corporation,causing the company to go insolvent.He was aware of the fact that the dividend would result in insolvency.Which of the following is true?

Accepted Answer

A)  He is liable only if he was a director
B)  He is liable for losses to the extent of his investment.
C)  He is personally liable and must return the funds to the corporation
D)  He is not liable,because shareholders are protected from liability
E)  He is liable because he violated the business judgment rule.F) A) and C)
G) B) and E)

Question 7

Which of the following is false regarding the liability of directors and officers for criminal behavior in the U.S.?

Accepted Answer

A)  Directors and officers can be held personally responsible for the crimes of other employees within the organization when they have failed to adequately supervise the employee's behavior.
B)  Directors and officers who use insider information to trade the corporation's stock for a profit can be held liable for breaching their fiduciary duty.
C)  A court may not find a corporate officer criminally liable for conduct of an employee unless the officer profited personally from the illegal activity.
D)  Directors and officers can be held personally responsible for their own crimes.
E)  According to the responsible person doctrine,an officer can be held criminally liable for conduct of an employee if the court determines that a responsible person would have known about and could have prevented the illegal activity.F) A) and E)
G) B) and C)

Question 8

Which of the following is NOT true of cumulative voting?

Accepted Answer

A)  It is guaranteed in RMBCA.
B)  Without it,majority shareholders could disregard the interests of the minority shareholders
C)  Without it,majority shareholders could monopolize control of the company
D)  It is more egalitarian than simple majority voting
E)  It ensures every voice within a corporation is heard,not just the voices of those with the most power.F) All of the above
G) A) and B)

Question 9

Patrice is a shareholder in a corporation but she cannot attend the corporate meeting.She wants to authorize someone else to vote for her.What authorization should she create?

Accepted Answer

A)  Proxy
B)  Permissive voucher
C)  Acknowledgement
D)  Approval
E)  There is no such document because a shareholder may not allow someone else to vote in the shareholder's place.F) A) and E)
G) B) and E) A

Question 10

Directors and officers have a fiduciary duty of care.

Accepted Answer

A) True 
 B)False

Question 11

By selling the kites,Tatiana was involved in which of the following objectionable activities,if any?

Accepted Answer

A)  She was not involved in any objectionable activities.
B)  She committed corporate profit reduction.
C)  She prevented profit maximization.
D)  She prevented corporate opportunity.
E)  She committed private-profit allocation.F) A) and B)
G) C) and D)

Question 12

A director of the corporation has embezzled money from the company.The other corporate directors fail to sue.What should the shareholders do?

Accepted Answer

A)  They have no recourse.
B)  They should claim a violation of the business judgment rule
C)  They should initiate a shareholder's derivative suit
D)  They should rewrite the corporate bylaws to require lawsuits in cases of embezzlement
E)  They should initiate a shareholder's direct suitF) A) and B)
G) A) and C)

Question 13

For purposes of shareholders meetings,what is considered a majority vote?

Accepted Answer

A)  The majority of the shares represented at a shareholder meeting where there is a quorum
B)  The vote of at least 10 percent of shareholders total.
C)  The vote of ½ of all outstanding shareholders.
D)  The vote of 2/3 of all outstanding shareholders.
E)  The vote of 90 percent of shareholders who make up a quorum.F) All of the above
G) None of the above

Question 14

Which of the following is a term for stock issued to individuals below its fair market value?

Accepted Answer

A)  Watered stock
B)  Unapproved stock
C)  Less-value stock
D)  Reduced stock
E)  No-par stockF) None of the above
G) A) and D)

Question 15

Who can call a special shareholder meeting?

Accepted Answer

A)  Only those authorized in the articles of incorporation
B)  The board of directors,shareholders who own at least 10 percent of the corporation's shares,and those authorized in the articles of incorporation
C)  Only the board of directors
D)  Only shareholders who own at least 10 percent of the corporation's outstanding shares
E)  No one.Meetings are held annuallyF) A) and D)
G) A) and C)

Question 16

Decisions of courts in ________ have a significant impact because more than half of U.S.public traded corporations are incorporated there.

Accepted Answer

A)  Florida
B)  New York
C)  New Jersey
D)  California
E)  DelawareF) B) and E)
G) A) and E)

Question 17

The primary goal of shareholders is to raise the value of the company stock.

Accepted Answer

A) True 
 B)False  True

Question 18

When the corporation will not issue physical stock certificates,shares are ________.

Accepted Answer

A)  Unapproved
B)  Acknowledged
C)  Approved
D)  Uncertificated
E)  UnacknowledgedF) C) and E)
G) B) and E) D

Question 19

Which of the following are outside directors who have business contacts with the corporation?

Accepted Answer

A)  Unaffiliated directors
B)  Associated directors
C)  Approved directors
D)  Affiliated directors
E)  Inside directorsF) A) and E)
G) All of the above

Question 20

Which of the following is true regarding the Revised Model Business Corporation Act?

Accepted Answer

A)  It has been fully rejected in over half of the states in favor of the Model Business Corporation Act.
B)  It has been adopted at least in part in over half of the states.
C)  It has been rejected in over half of the states in favor of the Model Corporate Act.
D)  It has been adopted fully by seventy-five percent of the states.
E)  There is no Revised Model Business Corporation Act.F) A) and B)
G) B) and C)

Exam 39: Corporations: Directors, officers, and Shareholders

The French Penal Code adopts what is called the ________ which requires that corporate criminal liability be applied only in cases that pertain to an "express mention in the law or in a French regulation."

Correct Answer
verified

Correct Answer
verified
Lydia has a duty to disclose her self-in...
View Answer

Which of the following is NOT within the primary role of directors?

Correct Answer
verified

If corporate directors fail to sue when the corporation has been harmed by an individual,another corporation,or a director,individual shareholders can file a[n] ________ on behalf of the corporation.

Correct Answer
verified

A stock subscription agreement signed before incorporation may obligate a person to purchase shares in the corporation.

Correct Answer
verified

Hans receives a dividend from his closely held corporation,causing the company to go insolvent.He was aware of the fact that the dividend would result in insolvency.Which of the following is true?

Correct Answer
verified

Which of the following is false regarding the liability of directors and officers for criminal behavior in the U.S.?

Correct Answer
verified

Which of the following is NOT true of cumulative voting?

Correct Answer
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Patrice is a shareholder in a corporation but she cannot attend the corporate meeting.She wants to authorize someone else to vote for her.What authorization should she create?

Correct Answer
verified
A

Directors and officers have a fiduciary duty of care.

Correct Answer
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By selling the kites,Tatiana was involved in which of the following objectionable activities,if any?

Correct Answer
verified

A director of the corporation has embezzled money from the company.The other corporate directors fail to sue.What should the shareholders do?

Correct Answer
verified

For purposes of shareholders meetings,what is considered a majority vote?

Correct Answer
verified

Which of the following is a term for stock issued to individuals below its fair market value?

Correct Answer
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Who can call a special shareholder meeting?

Correct Answer
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Decisions of courts in ________ have a significant impact because more than half of U.S.public traded corporations are incorporated there.

Correct Answer
verified

The primary goal of shareholders is to raise the value of the company stock.

Correct Answer
verified
True

When the corporation will not issue physical stock certificates,shares are ________.

Correct Answer
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D

Which of the following are outside directors who have business contacts with the corporation?

Correct Answer
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Which of the following is true regarding the Revised Model Business Corporation Act?

Correct Answer
verified

Exam 39: Corporations: Directors, officers, and Shareholders

The French Penal Code adopts what is called the ________ which requires that corporate criminal liability be applied only in cases that pertain to an "express mention in the law or in a French regulation."

Correct AnswerverifiedShow Answer

Correct AnswerverifiedLydia has a duty to disclose her self-in...View AnswerShow Answer

Which of the following is NOT within the primary role of directors?

Correct AnswerverifiedShow Answer

If corporate directors fail to sue when the corporation has been harmed by an individual,another corporation,or a director,individual shareholders can file a[n] ________ on behalf of the corporation.

Correct AnswerverifiedShow Answer

A stock subscription agreement signed before incorporation may obligate a person to purchase shares in the corporation.

Correct AnswerverifiedShow Answer

Hans receives a dividend from his closely held corporation,causing the company to go insolvent.He was aware of the fact that the dividend would result in insolvency.Which of the following is true?

Correct AnswerverifiedShow Answer

Which of the following is false regarding the liability of directors and officers for criminal behavior in the U.S.?

Correct AnswerverifiedShow Answer

Which of the following is NOT true of cumulative voting?

Correct AnswerverifiedShow Answer

Patrice is a shareholder in a corporation but she cannot attend the corporate meeting.She wants to authorize someone else to vote for her.What authorization should she create?

Correct AnswerverifiedA

Directors and officers have a fiduciary duty of care.

Correct AnswerverifiedShow Answer

By selling the kites,Tatiana was involved in which of the following objectionable activities,if any?

Correct AnswerverifiedShow Answer

A director of the corporation has embezzled money from the company.The other corporate directors fail to sue.What should the shareholders do?

Correct AnswerverifiedShow Answer

For purposes of shareholders meetings,what is considered a majority vote?

Correct AnswerverifiedShow Answer

Which of the following is a term for stock issued to individuals below its fair market value?

Correct AnswerverifiedShow Answer

Who can call a special shareholder meeting?

Correct AnswerverifiedShow Answer

Decisions of courts in ________ have a significant impact because more than half of U.S.public traded corporations are incorporated there.

Correct AnswerverifiedShow Answer

The primary goal of shareholders is to raise the value of the company stock.

Correct AnswerverifiedTrue

When the corporation will not issue physical stock certificates,shares are ________.

Correct AnswerverifiedD

Which of the following are outside directors who have business contacts with the corporation?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the Revised Model Business Corporation Act?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Lydia has a duty to disclose her self-in...
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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A

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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Correct Answer
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True

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D

Correct Answer
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Correct Answer
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