Question 1

Marjorie is a member of the board of directors of Techno Ko Corp. She would like to have the corporation lend her some money so that she can begin another business venture. Which of the following is correct regarding loans of a corporation to one of its directors?

Accepted Answer

A)   The Model Act permits a corporation to lend money to its directors with a majority vote of the other directors.
B)   The Sarbanes-Oxley Act prohibits any publicly held corporation from making personal loans to its directors or executive officers, with certain limited exceptions.
C)   Both the Model Act and the Revised Act prohibit loans to directors in all cases.
D)   The Sarbanes-Oxley Act permits a publicly held corporation to make personal loans to its directors or executive officers only with the consent of the shareholders.

Question 2

Under the Model Act and in a majority of the states, a quorum of shareholders at an annual meeting may be not less than percent of the shares entitled to vote.

Accepted Answer

A)   10
B)   33 1/3
C)   66 2/3
D)   50

Question 3

Theodore, as treasurer of Valleyview Corporation, had the duty to invest corporate earnings as he deemed best for the company. When Valleyview Corporation went public, the new board decided that a committee of the officers would make such investment decisions. If Theodore thereafter unilaterally contracted to purchase investment securities with corporate earnings as he had done many times before, such contract would be valid:

Accepted Answer

A)   since Theodore would have express authority.
B)   since Theodore had implied authority.
C)   under apparent authority if the seller knew of Theodore's past transactions.
D)   because of ratification if the board did not know of his actions.

Question 4

What are some of the areas where the board determines corporation policy?

Accepted Answer

A)   Selecting and removing officers
B)   Setting management compensation
C)   Initiating fundamental changes and declaring dividends
D)   All of these.

Question 5

Under the Statutory Close Corporation Supplement to the MBCA, a close corporation may operate without a board of directors.

Accepted Answer

A) True 
 B)False

Question 6

A quorum will consist of a majority of shares entitled to vote if there are no provisions for any other number in the articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 7

To whom does a large, publicly held corporation and its management have obligations?

Accepted Answer

A)   The corporation's shareholders
B)   Its employees, customers, and suppliers
C)   Communities in which the corporation is located
D)   All of these.

Question 8

Closely held corporations sometimes impose supermajority or unanimous quorum requirements even though this creates the possibility of deadlock at the director level.

Accepted Answer

A) True 
 B)False

Question 9

The officers determine the capital structure and financial policy of the corporation.

Accepted Answer

A) True 
 B)False

Question 10

Notice of a shareholders' meeting may be waived in writing.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following are directors in publicly held corporations?

Accepted Answer

A)   Inside directors
B)   Outside directors
C)   Affiliated directors
D)   Any of these.

Question 12

In closely held corporations, stock transfer restrictions are used to achieve the corporate equivalent of delectus personae.

Accepted Answer

A) True 
 B)False

Question 13

If the board delegates to a committee its duty to select a new company president:

Accepted Answer

A)   the members of that committee may be responsible individuals other than board members.
B)   the committee must be approved by the shareholders.
C)   the non-committee directors are relieved of liability for acts of the committee.
D)   the committee must consist of board members.

Question 14

By law, a shareholder is always entitled to one vote for each share of stock that he owns.

Accepted Answer

A) True 
 B)False

Question 15

A director's right of inspection of corporate books and records is:
a. similar to a shareholder's right to inspect.
b. considerably broader than a shareholder's right, but is still subject to limitations.
c. narrower than a shareholder's right.
d. unnecessary for most directors, since the books and records relate to officers' duties, not directors' duties.

Accepted Answer

a. majority, but the RMBCA allows the ar...

Question 16

The CFPA of 2010 requires that publicly held companies annually include a provision in their proxy statements for a binding shareholder vote on executive compensation.

Accepted Answer

A) True 
 B)False

Question 17

Members of the board of directors may not determine their own compensation.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is correct regarding the removal of Mr. X from the board of XYZ?

Accepted Answer

A)   The common law does not permit removal of a director for any reason.
B)   The RMBCA permits the removal of a director without cause.
C)   The articles of incorporation cannot provide for the removal of directors.
D)   Under common law and statutory law, a director can never be removed without cause.

Question 19

The board of directors appoints the officers of the corporation, who are agents of the corporation.

Accepted Answer

A) True 
 B)False

Question 20

With respect to the board of directors of a corporation, which of the following is NOT correct?

Accepted Answer

A)   They manage the business and affairs of the corporation.
B)   They are the shareholders' elected representatives.
C)   They must always obtain shareholder approval before deciding questions of operating policy.
D)   They have the authority to delegate power to officers and agents.

Exam 35: Management Structure

Which of the following is correct regarding the removal of Mr. X from the board of XYZ?

Correct Answer
verified

The CFPA of 2010 requires that publicly held companies annually include a provision in their proxy statements for a binding shareholder vote on executive compensation.

Correct Answer
verified

With respect to the board of directors of a corporation, which of the following is NOT correct?

Correct Answer
verified

The officers determine the capital structure and financial policy of the corporation.

Correct Answer
verified

Under the Statutory Close Corporation Supplement to the MBCA, a close corporation may operate without a board of directors.

Correct Answer
verified

To whom does a large, publicly held corporation and its management have obligations?

Correct Answer
verified

Correct Answer
verified
a. majority, but the RMBCA allows the ar...
View Answer

What are some of the areas where the board determines corporation policy?

Correct Answer
verified

Notice of a shareholders' meeting may be waived in writing.

Correct Answer
verified

The board of directors appoints the officers of the corporation, who are agents of the corporation.

Correct Answer
verified

Correct Answer
verified

Marjorie is a member of the board of directors of Techno Ko Corp. She would like to have the corporation lend her some money so that she can begin another business venture. Which of the following is correct regarding loans of a corporation to one of its directors?

Correct Answer
verified

In closely held corporations, stock transfer restrictions are used to achieve the corporate equivalent of delectus personae.

Correct Answer
verified

Under the Model Act and in a majority of the states, a quorum of shareholders at an annual meeting may be not less than percent of the shares entitled to vote.

Correct Answer
verified

A quorum will consist of a majority of shares entitled to vote if there are no provisions for any other number in the articles of incorporation.

Correct Answer
verified

Which of the following are directors in publicly held corporations?

Correct Answer
verified

Closely held corporations sometimes impose supermajority or unanimous quorum requirements even though this creates the possibility of deadlock at the director level.

Correct Answer
verified

If the board delegates to a committee its duty to select a new company president:

Correct Answer
verified

By law, a shareholder is always entitled to one vote for each share of stock that he owns.

Correct Answer
verified

Members of the board of directors may not determine their own compensation.

Correct Answer
verified

Exam 35: Management Structure

Which of the following is correct regarding the removal of Mr. X from the board of XYZ?

Correct AnswerverifiedShow Answer

The CFPA of 2010 requires that publicly held companies annually include a provision in their proxy statements for a binding shareholder vote on executive compensation.

Correct AnswerverifiedShow Answer

With respect to the board of directors of a corporation, which of the following is NOT correct?

Correct AnswerverifiedShow Answer

The officers determine the capital structure and financial policy of the corporation.

Correct AnswerverifiedShow Answer

Under the Statutory Close Corporation Supplement to the MBCA, a close corporation may operate without a board of directors.

Correct AnswerverifiedShow Answer

To whom does a large, publicly held corporation and its management have obligations?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. majority, but the RMBCA allows the ar...View AnswerShow Answer

What are some of the areas where the board determines corporation policy?

Correct AnswerverifiedShow Answer

Notice of a shareholders' meeting may be waived in writing.

Correct AnswerverifiedShow Answer

The board of directors appoints the officers of the corporation, who are agents of the corporation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Marjorie is a member of the board of directors of Techno Ko Corp. She would like to have the corporation lend her some money so that she can begin another business venture. Which of the following is correct regarding loans of a corporation to one of its directors?

Correct AnswerverifiedShow Answer

In closely held corporations, stock transfer restrictions are used to achieve the corporate equivalent of delectus personae.

Correct AnswerverifiedShow Answer

Under the Model Act and in a majority of the states, a quorum of shareholders at an annual meeting may be not less than percent of the shares entitled to vote.

Correct AnswerverifiedShow Answer

A quorum will consist of a majority of shares entitled to vote if there are no provisions for any other number in the articles of incorporation.

Correct AnswerverifiedShow Answer

Which of the following are directors in publicly held corporations?

Correct AnswerverifiedShow Answer

Closely held corporations sometimes impose supermajority or unanimous quorum requirements even though this creates the possibility of deadlock at the director level.

Correct AnswerverifiedShow Answer

If the board delegates to a committee its duty to select a new company president:

Correct AnswerverifiedShow Answer

By law, a shareholder is always entitled to one vote for each share of stock that he owns.

Correct AnswerverifiedShow Answer

Members of the board of directors may not determine their own compensation.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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verified
a. majority, but the RMBCA allows the ar...
View Answer

Correct Answer
verified

Correct Answer
verified

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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