Question 1

Officers of a corporation typically can have which types of agency authority?

Accepted Answer

A)   express only
B)   express and apparent only
C)   express and implied only
D)   implied and apparent only
E)   express,implied,and apparent

Question 2

Stockholders may not vote by electronic communication.

Accepted Answer

A) True 
 B)False

Question 3

Generally,a shareholder may not sue his corporation for which of the following?

Accepted Answer

A)   to enforce preemptive rights
B)   to compel the declaration of dividends
C)   to inspect the corporate books and records
D)   to recover an illegal dividend
E)   to cancel an ultra vires contract

Question 4

There are no accountants on the board of the Oriole Corporation.The board routinely relies on a CPA to explain the financial situation of the corporation.The board does not do an independent analysis of the CPA's report,but acts with care and diligence.In these circumstances,the board is:

Accepted Answer

A)   violating the duty of loyalty
B)   violating the duty to exercise due care
C)   violating the business judgment rule
D)   violating the duty of obedience
E)   not violating any duty

Question 5

Shareholders own the corporation.

Accepted Answer

A) True 
 B)False

Question 6

The preemptive right allows shareholders with sufficient shares of stock the right to be on the board of directors.

Accepted Answer

A) True 
 B)False

Question 7

In order to vote shares at a shareholders' meeting,a person must own the shares as of:

Accepted Answer

A)   the date the notice of the meeting is given
B)   the date the shareholders' list is prepared
C)   the record date
D)   the voting date
E)   the date of the meeting

Question 8

Officers are not liable on an unauthorized contract regardless if the corporation ratifies it or not.

Accepted Answer

A) True 
 B)False

Question 9

A special shareholders' meeting may be called by any person authorized to do so by the articles of incorporation or bylaws.

Accepted Answer

A) True 
 B)False

Question 10

Shareholders can lose their limited liability if a corporation has been operated without the correct separateness between the owner and the corporation.

Accepted Answer

A) True 
 B)False

Question 11

John is a director for Dream Drive Corporation.Dream Drive is in the business of selling insurance.John sees how lucrative this field is and starts a new corporation to sell insurance.John has violated his duty of:

Accepted Answer

A)   obedience
B)   loyalty
C)   care
D)   A and B only
E)   John has violated no duty.

Question 12

Shareholders may not inspect the minutes of shareholders' meetings.

Accepted Answer

A) True 
 B)False

Question 13

Hank is a director of the Cardinal Corporation.Cardinal is in the business of marketing new inventions.Katrina has just invented a new product and wants to have it marketed by Cardinal,so she shows and discusses the new product with Hank.Hank thinks the new product has the potential to generate huge profits,so Hank suggests that he handle the marketing personally,leaving Cardinal out of it.Hank's action is best described as which of the following?

Accepted Answer

A)   a violation of the duty prohibiting self-dealing
B)   a violation of the duty prohibiting usurping a corporate opportunity
C)   a violation of the duty prohibiting competition with the corporation
D)   a violation of the duty prohibiting insider trading
E)   not a violation of any duty

Question 14

All classes of common stock must have voting rights.

Accepted Answer

A) True 
 B)False

Question 15

The bylaws of a corporation may require a "supermajority" vote for certain issues.

Accepted Answer

A) True 
 B)False

Question 16

Bob and Rob each own 50 of the 100,000 issued and outstanding shares of Synapsegap Corporation.If Bob develops a product and starts a company that competes with the Synapsegap product,he:

Accepted Answer

A)   has violated the duty of loyalty to Synapsegap by competing with Synapsegap
B)   has violated the duty of loyalty to Synapsegap by self-dealing in a similar product
C)   has not violated any duty,but must sell his shares of stock in Synapsegap
D)   has not violated any duty so long as he has notified Synapsegap of his actions
E)   has not violated any duty,and need not give notice nor sell his stock

Question 17

Courts will pierce the corporate veil if the corporation has been formed without sufficient capital.

Accepted Answer

A) True 
 B)False

Question 18

The articles of incorporation,as well as the bylaws,may not require a greater than majority of directors to comprise a quorum of the vote of the board.

Accepted Answer

A) True 
 B)False

Question 19

"Piercing the corporate veil" can refer to:

Accepted Answer

A)   denying corporate existence to a corporation
B)   denying limited liability to owners of a corporation because the corporation failed to exercise reasonable care in its business decisions
C)   denying limited liability to owners of a corporation where the corporate affairs were not sufficiently segregated from those of the owners
D)   forcing a corporation to pay a dividend to its shareholders

Question 20

Mark is the treasurer of Sky-Hi-Tech Corporation and,as such,he is responsible for protecting the assets of the corporation.One of Mark's subordinates,Jill,is in charge of reconciling the monthly corporate bank statements.Over a period of several months,Jill embezzles a large amount of money from Sky-Hi-Tech,covering up the theft using her bank reconciliations.If Mark had adequately supervised Jill,she could not have embezzled this money.Mark's actions (or inactions) constitute a breach of his duty of:

Accepted Answer

A)   obedience
B)   due care
C)   loyalty
D)   ultra vires
E)   This is not a violation of any duty due to the business judgment rule.

Exam 37: Corporate Governance and the Sarbanes Oxley Act

Correct Answer
verified

Bob and Rob each own 50 of the 100,000 issued and outstanding shares of Synapsegap Corporation.If Bob develops a product and starts a company that competes with the Synapsegap product,he:

Correct Answer
verified

In order to vote shares at a shareholders' meeting,a person must own the shares as of:

Correct Answer
verified

Officers of a corporation typically can have which types of agency authority?

Correct Answer
verified

The bylaws of a corporation may require a "supermajority" vote for certain issues.

Correct Answer
verified

There are no accountants on the board of the Oriole Corporation.The board routinely relies on a CPA to explain the financial situation of the corporation.The board does not do an independent analysis of the CPA's report,but acts with care and diligence.In these circumstances,the board is:

Correct Answer
verified

John is a director for Dream Drive Corporation.Dream Drive is in the business of selling insurance.John sees how lucrative this field is and starts a new corporation to sell insurance.John has violated his duty of:

Correct Answer
verified

"Piercing the corporate veil" can refer to:

Correct Answer
verified

Correct Answer
verified

A special shareholders' meeting may be called by any person authorized to do so by the articles of incorporation or bylaws.

Correct Answer
verified

The articles of incorporation,as well as the bylaws,may not require a greater than majority of directors to comprise a quorum of the vote of the board.

Correct Answer
verified

Courts will pierce the corporate veil if the corporation has been formed without sufficient capital.

Correct Answer
verified

Stockholders may not vote by electronic communication.

Correct Answer
verified

The preemptive right allows shareholders with sufficient shares of stock the right to be on the board of directors.

Correct Answer
verified

Shareholders may not inspect the minutes of shareholders' meetings.

Correct Answer
verified

Generally,a shareholder may not sue his corporation for which of the following?

Correct Answer
verified

Officers are not liable on an unauthorized contract regardless if the corporation ratifies it or not.

Correct Answer
verified

Shareholders own the corporation.

Correct Answer
verified

Shareholders can lose their limited liability if a corporation has been operated without the correct separateness between the owner and the corporation.

Correct Answer
verified

All classes of common stock must have voting rights.

Correct Answer
verified

Exam 37: Corporate Governance and the Sarbanes Oxley Act

Correct AnswerverifiedShow Answer

Bob and Rob each own 50 of the 100,000 issued and outstanding shares of Synapsegap Corporation.If Bob develops a product and starts a company that competes with the Synapsegap product,he:

Correct AnswerverifiedShow Answer

In order to vote shares at a shareholders' meeting,a person must own the shares as of:

Correct AnswerverifiedShow Answer

Officers of a corporation typically can have which types of agency authority?

Correct AnswerverifiedShow Answer

The bylaws of a corporation may require a "supermajority" vote for certain issues.

Correct AnswerverifiedShow Answer

There are no accountants on the board of the Oriole Corporation.The board routinely relies on a CPA to explain the financial situation of the corporation.The board does not do an independent analysis of the CPA's report,but acts with care and diligence.In these circumstances,the board is:

Correct AnswerverifiedShow Answer

John is a director for Dream Drive Corporation.Dream Drive is in the business of selling insurance.John sees how lucrative this field is and starts a new corporation to sell insurance.John has violated his duty of:

Correct AnswerverifiedShow Answer

"Piercing the corporate veil" can refer to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A special shareholders' meeting may be called by any person authorized to do so by the articles of incorporation or bylaws.

Correct AnswerverifiedShow Answer

The articles of incorporation,as well as the bylaws,may not require a greater than majority of directors to comprise a quorum of the vote of the board.

Correct AnswerverifiedShow Answer

Courts will pierce the corporate veil if the corporation has been formed without sufficient capital.

Correct AnswerverifiedShow Answer

Stockholders may not vote by electronic communication.

Correct AnswerverifiedShow Answer

The preemptive right allows shareholders with sufficient shares of stock the right to be on the board of directors.

Correct AnswerverifiedShow Answer

Shareholders may not inspect the minutes of shareholders' meetings.

Correct AnswerverifiedShow Answer

Generally,a shareholder may not sue his corporation for which of the following?

Correct AnswerverifiedShow Answer

Officers are not liable on an unauthorized contract regardless if the corporation ratifies it or not.

Correct AnswerverifiedShow Answer

Shareholders own the corporation.

Correct AnswerverifiedShow Answer

Shareholders can lose their limited liability if a corporation has been operated without the correct separateness between the owner and the corporation.

Correct AnswerverifiedShow Answer

All classes of common stock must have voting rights.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified