question

Lisha is incorporating her business. The business's home state is Wisconsin. Business will be conducted in California, Michigan, Pennsylvania, and Virginia. Lisha:

answer

can incorporate the business in any state

question

Katrina decided to incorporate her business under the name TriHeart Inc. Before TriHeart was incorporated, Katrina signed a contract in the name of TriHeart, Inc. to have some office space remodeled. Which statement is correct?

answer

TriHeart will be liable on the contract only if the corporation adopts the contract

question

A corporate charter is filed with:

answer

a state's Secretary of State office

question

SuperCo. purchased 20,000 shares of its own stock that had previously been owned by private investors. The stock SuperCo. repurchased is called:

answer

treasury stock

question

In Delaware, a person may reserve a corporate name:

answer

for 120 days by paying a $75 fee

question

The officers of a corporation are:

answer

chosen by the board of directors

question

Which of the following groups has the authority to manage a corporate business?

answer

Directors

question

Defining a corporation with such information as the corporate name, the number and type of authorized shares of stock, identification of the purpose and the agent, is done through the:

answer

All of these answers. All of these terms are used to identify the same document (charter, articles of incorporation, certificate of organization)

question

Demi is an officer of a corporation. She made a difficult business decision. When challenged about her decision, the court ruled she had acted in good faith and that the business judgment rule applied. As such:

answer

Demi will not be held personally liable for a decision that results in money losses to the company

question

If a court determines a manager's corporate decision amounted to self-dealing:

answer

the business judgment rule will not apply

question

In conjunction with an annual shareholder meeting, a corporation must provide shareholders with:

answer

All of these answers (an annual report, a proxy, a proxy statement)

question

Which of the following describes the duty of loyalty?

answer

It prohibits making a decision that benefits the decision-maker at the expense of the corporation

question

In 1975, the top 100 CEOs earned roughly 40 times as much as the average worker. Today's top CEOs earn approximately ________ times as much as the average worker.

answer

400

question

Arthur is a director of Arcamax. Arthur wants to personally make a major purchase from Sho Co. If it knew of the opportunity, Arcamax might be also interested in making that same purchase. Arthur must:

answer

first offer the opportunity to make the purchase to the disinterested directors of Arcamax or its shareholders

question

Lani is on the board of directors of Net Plus. Net Plus is looking for a warehouse to purchase. Lani owns a warehouse. In order for Lani to sell her warehouse to Net Plus:

answer

the disinterested members of the board of directors may approve the transaction

question

The officers of a corporation are:

answer

chosen by the board of directors

question

Tagami is incorporating her business. The business's home state is Washington. Business will be conducted in California, Oregon, and Idaho, too. Tagami:

answer

can incorporate the business in any state

question

MegaCorp purchased 40,000 shares of its own stock that had previously been owned by private investors. The stock MegaCorp repurchased is called:

answer

treasury stock

question

SuperCo. is incorporated under Delaware law. It is registered to do business in New York. Legally, in New York SuperCo. is known as what kind of corporation?

answer

Foreign

question

SuperCo. is incorporated in the state of Delaware and is registered only in Delaware. Dolly purchased a SuperCo. product from a company's sales representative following a presentation in Michigan. Dolly was seriously injured by the product in Michigan. Under the Model Act, if Dolly sues in Michigan, can SuperCo. defend the suit there?

answer

Yes, SuperCo. can defend against a lawsuit in Michigan regardless of whether SuperCo. is registered to do business in that state

question

George owns 100 shares of cumulative preferred stock in Seaside Transport, Inc. Jackie owns 50 non-cumulative preferred shares, and Orwell owns 120 shares of common stock. Seaside does not pay dividends in 2007. In 2009:

answer

All of these answers (George and Jackie must receive their 2009 dividends before Orwell is paid any 2009 dividends & Orwell cannot receive any 2009 dividends until George is paid for the 2007 dividends & Jackie cannot receive the dividends Seaside could not afford to pay in 2007. She will just lose them)

question

A board of directors is considering whether to invest a great deal of money into research and development. Such a decision could have a long-term beneficial effect for the company's future. As an alternative, the board could forego the expenditure into research and development and buy back its own shares in order to immediately increase the company's reserves. Which of the below groups would most likely favor the option to increase the company's reserves and not invest in more research and development?

answer

Shareholders

question

Which of the following is the most appropriate term to use when describing management's duty to its shareholders?

answer

Fiduciary duty

question

Management's duty to have a rational business purpose, avoid illegal behavior, and make informed decisions refers to its:

answer

duty of care

question

Which of the following is NOT one of the circumstances in which courts will hold shareholders personally liable for the debts of the corporation?

answer

Accounting discrepancies

question

Who has the authority to manage the corporate business?

answer

Directors

question

A manager who has engaged in self-dealing has violated the ________ to the corporation.

answer

Duty of loyalty

question

A director violates the corporate opportunity doctrine if he or she competes with the corporation, unless the disinterested directors ________ the director's actions.

answer

Approve of

question

Which piece of legislation gives shareholders acting in good faith the right to inspect and copy the corporation's records?

answer

The Model Act

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