Question 1

Starr Cardio,Inc.,is a small business.Ted,Uma,and eleven other members of the Starr family own all of its stock.Currently,Starr's income is taxed at the corporate level and,after being distributed to the family members,at the shareholder level.Can Starr retain its corporate status but otherwise avoid this double taxation If so,how

Accepted Answer

The answer of Starr Cardio,Inc.,is a small business.Ted,Uma,and eleven other...

Question 2

Orin is a shareholder of Pinkwater Corporation.In some states,Orin might incur personal liability for Pinkwater obligations if he

Accepted Answer

The answer of Orin is a shareholder of Pinkwater Corporation.In...

Question 3

Naomi and Ogden are shareholders of MediCare Residences,Inc.As shareholders,they must approve

Accepted Answer

Conducting a merger is a major decision that can have a significant impact on the company and its shareholders. Therefore, shareholder approval is typically required for such a decision.

Answer: B 
 Pursuing new business opportunities can also be a substantial decision that could affect the company's future. Shareholders may want a say in whether or not the company should take on these opportunities.

Answer: C 
 While shareholders may have an interest in the company's management and its decisions, terminating a managerial employee is typically the responsibility of the board of directors or executive management. Shareholder approval is not typically required for this type of decision.

Answer: D 
 Negotiating a contract between management and labor is typically a responsibility of the company's management and the labor union. While shareholders may have an interest in the company's labor relations, they do not typically get involved in the negotiation process itself. Therefore, shareholder approval is not typically required for this type of decision.

Question 4

Rocco is a director of Spa Lids & Tubs,Inc.Under the standard of due care owed by directors of a corporation,Rocco's decisions must be

Accepted Answer

The standard of due care requires that a director's decisions be informed and reasonable, taking into account all available information and acting in the best interests of the corporation and its shareholders. It does not require perfection or unquestionable decisions.

Question 5

Genna is a director of Fab Stuff Corporation.Without informing Fab,Genna starts up Evertrendy,Inc.,to compete with Fab.Genna is liable for breach of

Accepted Answer

Genna, as a director of Fab Stuff Corporation, owes a duty of loyalty to the company. By starting up Evertrendy, Inc. to directly compete with Fab Stuff, Genna is acting against the best interests of Fab Stuff and violating her duty of loyalty.

Question 6

Ricardo is a shareholder of Speedy Bikes Company (SBC).When the directors fail to undertake an action to redress a wrong suffered by SBC,Ricardo files a suit on the firm's behalf.Any damages recovered by Ricardo's suit will normally go to

Accepted Answer

Ricardo filed the suit on SBC's behalf, so any damages recovered will belong to the company, not to Ricardo personally.

Question 7

Officers and employees of Apples Corporation and Oranges Corporation are convicted of conspiring to violate a federal law that is punishable by a term of imprisonment and a fine.Can Apples and Oranges be held liable for these crimes If so,how can they be punished

Accepted Answer

The answer of Officers and employees of Apples Corporation and...

Question 8

Fiona owns one share of stock in GR8 Boards Corporation,as evidenced by a stock certificate.Fiona loses the certificate.Her ownership of the stock is

Accepted Answer

Fiona's ownership of the stock is not affected, even if she loses the certificate. She can request a new certificate from the company or a broker, but her ownership remains the same.

Question 9

Zero Sum Games Corporation has forty-three shareholders.The minimum number that must be present at a meeting for a shareholders' vote is

Accepted Answer

A quorum is the minimum number of shareholders required to be present at a meeting in order to conduct official business. The exact percentage or number needed for a quorum can vary depending on the company's bylaws, but it is typically set at a level that ensures a reasonable representation of the shareholders. In this case, the question doesn't specify the required percentage or number for a quorum, but it does state that there are 43 shareholders. Therefore, it is reasonable to assume that a quorum would be less than 43, and B is the best choice since it specifically refers to a quorum. The other options are less likely to be the correct answer since they don't directly address the minimum number of shareholders needed for a meeting vote.

Question 10

Heidi and Ian are directors and shareholders of Globe Software,Inc.Heidi's written authorization to Ian to vote Heidi's shares at a Globe shareholders' meeting is

Accepted Answer

Heidi's written authorization to Ian to vote Heidi's shares at a Globe shareholders' meeting is a proxy, which is a written authorization given by a shareholder to another person to attend and vote at a shareholders' meeting on behalf of the shareholder. It is not a violation of the duty of loyalty or a preemptive right or a quorum.

Question 11

Odell is a director of Price Rite,Inc.As a director,with respect to the corporation,Odell is

Accepted Answer

As a director, Odell is a fiduciary, meaning he owes a duty of loyalty and care to the corporation and its shareholders. Fiduciaries are responsible for making decisions in the best interest of the corporation, not for their own personal gain. The other choices (B, C, and D) are not applicable to Odell's role as a director in this context.

Question 12

Gladys is a shareholder of Frozen Yogurt,Inc.As a shareholder,Gladys must approve

Accepted Answer

The answer of Gladys is a shareholder of Frozen Yogurt,Inc.As...

Quiz 15: Corporations