Fact Pattern 20-1
Tonya is the president of Big Corporation. Big Corporation is looking for land on which to build a new facility. Tonya locates suitable land, but purchases it for herself with plans to sell it at a profit at a later date. Rick, the majority shareholder of Big Corporation hears about Tonya's purchase and complains to her about it. She tells Rick that she viewed and purchased the land on her own time and that she did not breach any duties owed to the corporation. Rick tells her that she should reconsider and that he plans to discuss the matter with the rest of the board.
-Refer to fact pattern 20-1. Which of the following is a widely used test for determining whether an opportunity belongs to a corporation?

Question

Quizplus · Accepted Answer

The line-of-business test is a widely used test for determining whether an opportunity belongs to a corporation. This test considers whether the opportunity is in the same line of business as the corporation or whether the corporation has an interest or expectancy in the opportunity. In this case, since Big Corporation is looking for land on which to build a new facility, the land purchase made by Tonya may be considered an opportunity that belongs to the corporation.

Fact Pattern 20-1 Tonya Is the President of Big Corporation. Big Corporation Is