Four years ago, Ben Ratzi incorporated a corporation and became the sole shareholder, director and officer. He lent the corporation $10,000 and took a debenture from the corporation as security for repayment of the loan. The corporation prospered. Last year, your brother began supplying the corporation with office supplies. He was paid at the end of each month for supplies delivered during that month. For the last six months, however, he has not been paid. He learned that other suppliers had not been paid either because sales dropped drastically, apparently due to Ratzi's harsh management style, which has upset the entire staff. Which of the following is true?
A) Your brother has no claim against the corporation because it has limited liability.
B) If this corporation were placed into bankruptcy, Ratzi would be in a better position than your brother for receiving proceeds realized from the sale of the assets of the corporation.
C) Your brother could take an action under statutory "relief from oppression" provisions.
D) If Ratzi dies, his corporation would automatically die too, and there wouldn't be any person to sue.
E) If your brother decided to sue for the debt, he could sue Ratzi because he was the sole shareholder and his management style caused all the trouble.
Correct Answer:
Verified
Q1: In jurisdictions in which the registration system
Q3: You have been asked by two fellow
Q4: Three classmates incorporated about a week after
Q5: Which of the following attracts the dissent
Q6: After Bill Roles graduated from university, he
Q7: ABC Ltd. is a closely-held corporation. Two
Q8: John and two friends incorporated a closely-held
Q9: Smith, Jones, and Brown incorporated XYZ Ltd.
Q10: A real estate agent, by virtue of
Q11: Which of the following is an advantage
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents