Business law Ch.20 – Flashcards
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Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is a legal entity created and recognized by
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state law
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Ruby Red Corporation has six shareholders, four of whom are members of the same family. All of Ruby's shareholders agree in writing to operate without shareholders' meetings. This most likely warrants
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no penalties or sanctions.
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Niki owns O.K. Oil Corporation. Niki uses O.K.'s funds to pay her personal expenses, creates Pure Fuel Corporation to engage in the same business as O.K., transfers O.K.'s assets to Pure Fuel, and petitions O.K. into bankruptcy. This most likely warrants
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a piercing of O.K.'s corporate veil
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Flite-Craft Corporation makes and sells aircraft parts. In most states, the minimum number of directors that must be present before Flite-Craft's board can transact its business is
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a majority of the number authorized in the articles or bylaws
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Sol is chairman of the board of Tasty Foods Corporation. Uma, a consumer, falls sick after eating a Tasty product. Uma sues Tasty, and Sol individually. Tasty may pay Sal's legal fees
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regardless of the outcome.
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Nina is a director of Olivia's Olives, Inc. Under the standard of due care owed by directors of a corporation, Nina's decisions must be
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informed and reasonable
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Luke is a director of Motor Parts Corporation. Luke makes decisions with respect to Motor Parts in good faith, in what he believes is the firm's best interest, and without violating any duties owed to it. If, despite these circumstances, Luke exercises poor business judgment, under the business judgment rule Luke is
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immune from liability
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Lovey is a shareholder of Matchless Corporation with preemptive rights. With these rights, Lovey can
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buy a prorated share of a new issue of stock before other buyers
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Natalie is a shareholder of Off-Road Vehicle Company. As a shareholder, Natalie does not have
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a right to compensation
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Estimable Financial Corporation merges with First Bank Corporation, with Estimable Financial absorbing First Bank. After the merger
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Estimable Financial is the surviving corporation
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Mall Stores Corporation owns 95 percent of the shares of Niche Retail Corporation. Mall Stores combines with Niche Retail, but only Mall Stores continues to exist. This transaction was
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a short term merger
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Ruff Games, Inc., wishes to acquire a controlling interest in Smart Toy Company by buying its stock. A public offer by Ruff Games to Smart Toy shareholders is
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a tender offer
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Precise Device Corporation and Quality Instruments, Inc., decide to merge. This corporate combination does not require the approval of
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Precise and Quality's officers and employees
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RayAnn is a corporate officer for Timmy's Trees, Inc. As a corporate officer, RayAnn is
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involved in the day-to-day operations of Timmy's Trees
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Etta is a director of Trendy Stuff Corporation. Without informing Trendy, Etta goes into business with GR8 Things, Inc., in competition with Trendy. Etta is liable for breach of
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the duty of loyalty
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Giant Lift Corporation purchases all of the assets of Heavy Hydraulics Corporation. With respect to Heavy Hydraulics's liabilities, Giant Lift is
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responsible if the sale is in fact a merger or consolidation
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Inez and Jason are the shareholders and directors of Kleen Kustodial Corporation. Lily and Moe are Kleen's officers. As in other corporations, the responsibility for the overall management of Kleen rests with
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the board of directors.
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Jean and Olivia want to form and do business as Cake Cups Corporation. A corporation is
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an artificial legal person.
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George is the founder of Excellent Exotics Corporation. Wilson is a shareholder and director and Bill is an officer. The daily business operations of Excellent Exotics are overseen by
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Bill
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Painless Dental Equipment Company is incorporated in Colorado. In Wyoming, Painless is
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a foreign corporation
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Lyla is a common shareholder in Norman's Nutty Nuts Corporation. As a common shareholder, Lyla is
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not guaranteed any payments of dividends.
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Coast-to-Coast Distribution, Inc., is a direct-mail distribution company. Like most corporations, Coast-to-Coast's employees include its
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officers
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Denise, Ervin, and Flem occupy the positions of directors on the board of Gallery Corporation. As directors, they may not
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subordinate the corporation's welfare to their personal interests
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Rosa and Sean are directors of Tech, Inc. Rosa's written authorization to Sean to vote Rosa's shares at a Tech shareholders' meeting is
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a proxy
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Eye Appliance Company and Fresh Views, Inc., wish to combine all of their assets, stock, and personnel into a new firm to be called Goggles Corporation. This is
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a consolidation
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Mall Stores Corporation owns 95 percent of the shares of Niche Retail Corporation. Mall Stores combines with Niche Retail, but only Mall Stores continues to exist. This transaction was
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a short-form merger
