Question 1

The dissolution of a corporation:

Accepted Answer

A)  Can never be voluntary on the part of stockholders.
B)  May be sought by the state for failure to pay specified taxes for a given number of years
C)  Allows it to make contracts to carry on business for six months.
D)  May require the stockholders to pay debts the corporation's assets cannot cover.

Question 2

Attempts by competing sides to secure majority of stockholders' votes are known as proxy wars.

Accepted Answer

A) True 
 B)False

Question 3

A merger occurs when two corporations combine to form a new corporation.

Accepted Answer

A) True 
 B)False

Question 4

As fiduciaries of the corporation, directors incur liability for losses when they are caused by bad faith.

Accepted Answer

A) True 
 B)False

Question 5

Stockholders have the absolute right to inspect the corporation's books.

Accepted Answer

A) True 
 B)False

Question 6

A corporation must give notice specifying the subjects to be discussed for a special meeting of shareholders.

Accepted Answer

A) True 
 B)False  True

Question 7

The directors of a corporation do not have the power to delegate authority to any of its members to act for the corporation.

Accepted Answer

A) True 
 B)False

Question 8

Stockholders, by virtue of their investment in a corporation, have the right to act as its agent. ​

Accepted Answer

A) True 
 B)False

Question 9

The officers of a corporation:

Accepted Answer

A)  Are the agents of the corporation.
B)  Are selected and removed by the stockholders.
C)  Have their positions specified by federal law.
D)  ​M ust be elected by a two-thirds vote.

Question 10

Which of the following best describes a proxy?

Accepted Answer

A)  A person authorized to vote for another
B)  A person who relinquishes his right to vote
C)  A person authorized to sell the company's stock
D)  A document required by law to be in a specified form

Question 11

When a corporation terminates its existence it must surrender its articles of incorporation.

Accepted Answer

A) True 
 B)False  True

Question 12

The board of directors is the primary policy-making body of the corporation.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is true of a quorum?

Accepted Answer

A)  It is the maximum number of proxies that are allowed
B)  Statutes, bylaws, or the articles of incorporation ordinarily require a majority of outstanding stock to constitute a quorum.
C)  A stockholder's proxy cannot be counted in reaching a quorum in a convened meeting.
D)  At common law, a quorum consisted of the number of proxies at a properly convened meeting.

Question 14

Which of the following best describes a preemptive right?

Accepted Answer

A)  It is the right to purchase additional stock on the stock exchange.
B)  It is the right to sell existing shares back to the corporation.
C)  It is the right to purchase shares before the incorporation of a company.
D)  It is the right to purchase new capital stock in proportion to shares owned.

Question 15

A foreign corporation who has authority to do business in the state is allowed to form contracts.

Accepted Answer

A) True 
 B)False

Question 16

Explain the two devices used to give minority stockholders a voice on the board of directors. ​

Accepted Answer

The two devices used to give minority st...

Question 17

Only stockholders shown by the stockholders' record book have a right to vote.

Accepted Answer

A) True 
 B)False  True

Question 18

Which of the following is an example of cumulative voting?

Accepted Answer

A)  Dan and Ben own ten shares together and two directors are to be elected, so they receive the right to cast 12 votes.
B)  Dan owns two shares and two directors are to be elected, but he receives no right to cast a vote.
C)  Dan owns six shares and two directors are to be elected, so he receives the right to cast six votes.
D)  Dan owns ten shares, and five directors are to be elected, so he receives the right to cast 50 votes.

Question 19

Which of the following is true of a corporation?

Accepted Answer

A)  It is an artificial being, existing only in contemplation of law.
B)  Shareholders of a corporation represent the corporation as agents.
C)  Stockholders perform all the administrative functions of the corporation.
D)  Stockholders directly control the day to day activities of a corporation.

Question 20

Which of the following best describes whistleblowers?

Accepted Answer

A)  They are people who take part in insider trading activities.
B)  They are a group of people engaged in stock taxation.
C)  They are people who expose wrongdoing in an organization.
D)  They are people who subscribe for fresh capital stock.

Exam 34: Management and Dissolution of a Corporation

The dissolution of a corporation:

Correct AnswerverifiedShow Answer

Attempts by competing sides to secure majority of stockholders' votes are known as proxy wars.

Correct AnswerverifiedShow Answer

A merger occurs when two corporations combine to form a new corporation.

Correct AnswerverifiedShow Answer

As fiduciaries of the corporation, directors incur liability for losses when they are caused by bad faith.

Correct AnswerverifiedShow Answer

Stockholders have the absolute right to inspect the corporation's books.

Correct AnswerverifiedShow Answer

A corporation must give notice specifying the subjects to be discussed for a special meeting of shareholders.

Correct AnswerverifiedTrue

The directors of a corporation do not have the power to delegate authority to any of its members to act for the corporation.

Correct AnswerverifiedShow Answer

Stockholders, by virtue of their investment in a corporation, have the right to act as its agent. ​

Correct AnswerverifiedShow Answer

The officers of a corporation:

Correct AnswerverifiedShow Answer

Which of the following best describes a proxy?

Correct AnswerverifiedShow Answer

When a corporation terminates its existence it must surrender its articles of incorporation.

Correct AnswerverifiedTrue

The board of directors is the primary policy-making body of the corporation.

Correct AnswerverifiedShow Answer

Which of the following is true of a quorum?

Correct AnswerverifiedShow Answer

Which of the following best describes a preemptive right?

Correct AnswerverifiedShow Answer

A foreign corporation who has authority to do business in the state is allowed to form contracts.

Correct AnswerverifiedShow Answer

Explain the two devices used to give minority stockholders a voice on the board of directors. ​

Correct AnswerverifiedThe two devices used to give minority st...View AnswerShow Answer

Only stockholders shown by the stockholders' record book have a right to vote.

Correct AnswerverifiedTrue

Which of the following is an example of cumulative voting?

Correct AnswerverifiedShow Answer

Which of the following is true of a corporation?

Correct AnswerverifiedShow Answer

Which of the following best describes whistleblowers?

Correct AnswerverifiedShow Answer

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True

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Stockholders, by virtue of their investment in a corporation, have the right to act as its agent.

Correct Answer
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True

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Explain the two devices used to give minority stockholders a voice on the board of directors.

Correct Answer
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The two devices used to give minority st...
View Answer

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True

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