Question 1

An officer or director of a corporation may be liable if they acted beyond their scope and corporation property was damaged or wasted.

Accepted Answer

An officer or a director will be liable to the corporation if the business is damaged by an act exceeding the person's authority.

Question 2

The term for outsiders who attempt to gain control of a corporation is called raiders.

Accepted Answer

Outsiders who attempt to acquire control of publically held corporations are called raiders.

Question 3

In order to facilitate the operation of the board of directors,many tasks and decisions are delegated to a committee of the board.

Accepted Answer

In order to facilitate the operation of the board of directors,many tasks and decisions are delegated to a committee of the board.

Question 4

Officers of a corporation,like a vice president,are also agents of the corporation.

Accepted Answer

The officers of the corporation also serve as agents of the business.

Question 5

Alvin and Billy own 70 percent of Beta Corporation.Claude owns 30 percent of Beta Corporation.Alvin and Billy consistently vote and act in ways that benefit them,but harm Claude.Claude may claim oppression as a minority shareholder.

Accepted Answer

When a group of shareholders has been isolated for beneficial treatment to the detriment of another isolated group of shareholders,the disadvantaged group may complain of oppression.

Question 6

The most common committee created from board of directors is an executive committee,which typically is given the power to act when the board of directors is not in session.

Accepted Answer

The most common board committee is the executive committee which is usually given the authority to govern when the board is not in session.

Question 7

A director has a right to inspect corporate books and records that contain corporate information essential to the director's performance of her duties.

Accepted Answer

A director has a right to inspect corporate books and records that contain corporate information essential to the director's performance of her duties.

Question 8

Directors and officers are liable to the business for losses resulting from their lack of due care.

Accepted Answer

Directors and Officers are liable for losses to the corporation resulting from their lack of care or diligence.

Question 9

Directors should be shareholders of the corporation on whose board they serve.

Accepted Answer

Directors need not be shareholders of the corporation on whose board they serve.

Question 10

The two easiest ways to freeze out minority shareholders are the freeze-out acquisition and the share split.

Accepted Answer

The two easiest ways to freeze out minority shareholders are the freeze-out merger and the reverse share split.

Question 11

Under the doctrine of respondeat superior,a corporation is liable for an employee's tort that is reasonably connected to the authorized conduct of the employee.

Accepted Answer

Under the doctrine of respondeat superior,a corporation is liable for an employee's tort that is reasonably connected to the authorized conduct of the employee.

Question 12

The traditional view is that a corporation is not liable for a crime because criminal guilt requires presence of intent.

Accepted Answer

The traditional view was that a corporation could not be guilty of a crime because criminal guilt required intent.

Question 13

The primary source of power for a corporation is the GATT (General Agreement on Trade and Tariffs).

Accepted Answer

The primary source of a corporation's powers is the corporation statute of the state in which it is incorporated.

Question 14

The primary corporate objective is to make money for the shareholders.

Accepted Answer

The traditional objective of the business corporation has been to enhance corporate profits and shareholder gain.

Question 15

Unless the articles of incorporation state otherwise,directors cannot be removed with or without cause.

Accepted Answer

Modern corporation statutes permit shareholders to remove directors with or without cause.However,most corporations have provisions in their articles authorizing the shareholders to remove directors only for cause.

Question 16

Straight voting permits a single holder of more than 30 percent of the shares of a corporation to dominate the management of the corporation.

Accepted Answer

Straight voting permits a holder of more than 50 percent of the shares of a corporation to dominate the corporation by electing a board of directors that will manage the corporation as he wants it to be managed.

Question 17

The total fairness test permits a shareholder to require the corporation to purchase his shares at a fair price.

Accepted Answer

A right of appraisal permits a shareholder to require the corporation to purchase his shares at a fair price.

Question 18

The Model Business Corporation Act has made the inclusion of purpose clause in the articles compulsory.

Accepted Answer

Under the Model Business Corporation Act (MBCA),the inclusion of a purpose clause in the articles is optional.

Question 19

Corporate constituency statutes permit the board of directors to consider the interests of persons other than the corporation's shareholders when the directors make corporate decisions.

Accepted Answer

Corporate constituency statutes permit the board of directors to consider the interests of persons other than the corporation's shareholders when the directors make corporate decisions.

Question 20

Delta Corporation's board of directors is considering a resolution that may cause severe liability to the directors.Wayne,a board member,disagrees with the decision.Unless he clearly registers his dissent,he may be liable.

Accepted Answer

A director who assents (by attending a board meeting and not registering his dissent)to an action of the board of directors may be held liable for the board's exceeding its authority or its failing to meet its duty of due care or loyalty.

Quiz 43: Management of Corporations

An officer or director of a corporation may be liable if they acted beyond their scope and corporation property was damaged or wasted.

The term for outsiders who attempt to gain control of a corporation is called raiders.

In order to facilitate the operation of the board of directors,many tasks and decisions are delegated to a committee of the board.

Officers of a corporation,like a vice president,are also agents of the corporation.

Alvin and Billy own 70 percent of Beta Corporation.Claude owns 30 percent of Beta Corporation.Alvin and Billy consistently vote and act in ways that benefit them,but harm Claude.Claude may claim oppression as a minority shareholder.

The most common committee created from board of directors is an executive committee,which typically is given the power to act when the board of directors is not in session.

A director has a right to inspect corporate books and records that contain corporate information essential to the director's performance of her duties.

Directors and officers are liable to the business for losses resulting from their lack of due care.

Directors should be shareholders of the corporation on whose board they serve.

The two easiest ways to freeze out minority shareholders are the freeze-out acquisition and the share split.

Under the doctrine of respondeat superior,a corporation is liable for an employee's tort that is reasonably connected to the authorized conduct of the employee.

The traditional view is that a corporation is not liable for a crime because criminal guilt requires presence of intent.

The primary source of power for a corporation is the GATT (General Agreement on Trade and Tariffs).

The primary corporate objective is to make money for the shareholders.

Unless the articles of incorporation state otherwise,directors cannot be removed with or without cause.

Straight voting permits a single holder of more than 30 percent of the shares of a corporation to dominate the management of the corporation.

The total fairness test permits a shareholder to require the corporation to purchase his shares at a fair price.

The Model Business Corporation Act has made the inclusion of purpose clause in the articles compulsory.

Corporate constituency statutes permit the board of directors to consider the interests of persons other than the corporation's shareholders when the directors make corporate decisions.

Delta Corporation's board of directors is considering a resolution that may cause severe liability to the directors.Wayne,a board member,disagrees with the decision.Unless he clearly registers his dissent,he may be liable.